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American Morning
AIG Names Banks That Received Bailout Money; Lawmakers Blast AIG; Dick Cheney Speaks Out; Investor Sues "The Donald" on Failed Investment; U.S. Navy Forced to Cut Down on Personnel
Aired March 16, 2009 - 06:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: It's coming up now on one minute to the top of the hour. We're breaking down big economic head lines for you this morning. Over the next 15 minutes, we're explaining what it all means for you.
In an interview with CBS, Fed Chairman Ben Bernanke says the recession could be over by the end of this year. And that's certainly good news if it comes true.
President Obama's tough economic mind Christina Romer says the fundamentals of the economy are sound despite the mess that we're in. Romer says you, the American worker, are the country's strongest assets. She also says, we have, quote, "good capital stock and good technology."
And new outrage aimed at insurance giant, AIG, today. The Fed chief, the Treasury secretary and lawmakers all furious over the company's plans to pay out bonuses totaling $165 million. That's after holding out their hand and taking $170 billion from taxpayers. AIG now says it is cutting those bonuses by at least 30 percent.
But it's still a huge whack (ph) of money.
And this morning, we kick off an unprecedented television event. CNN devoting five days of in-depth reporting from our correspondents worldwide to the money meltdown and how it's changing your life.
KIRAN CHETRY, CNN ANCHOR: We're calling it "ROAD TO RESCUE," and we're breaking down this story as only CNN can. Our coverage kicks off this morning because CNN Money team and the Best Political Team on TV believe that knowledge is power, and we're trying to help find solutions that can help you and your family get through this.
ROBERTS: And with that, the leader of the Federal Reserve is offering up a timeline for recovery. In a rare interview, Chairman Ben Bernanke told CBS that he is hopeful the financial system will start working for you again.
(BEGIN VIDEO CLIP)
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: We'll see recovery beginning next year and it will pick up steam over time.
(END VIDEO CLIP)
ROBERTS: Christine Romans "Minding Your Business" this morning. Pretty extraordinary to hear from a sitting fed chairman.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It really is. It's unprecedented. Fed chairmen do not sit down for interviews. It's unheard of in normal times, but these are not normal times. As Ben Bernanke himself said on "60 Minutes" he said he had three things he wanted to tell the American people.
(BEGIN VIDEOTAPE)
BERNANKE: The Federal Reserve is here and is going to do everything possible to support this recovery.
The second thing I would say is that recovery is not going to happen until the financial markets and the banks are stabilized. And we do have a plan. We have a program for that, but it's going to take some patience. It's going to take some support and, you know, we're going to have to go forward with that.
But the third and final thing I'd just like to say to the American people is that I have every confidence that this economy will recover and recover in a strong and sustained way.
ROMANS (voice-over): Bernanke said the recession will likely end later this year, and a recovery may begin next year if the financial system stabilized. He said, "New American depression has been averted but vowed not to make the mistakes that led to the Great Depression, letting the banks fail."
UNIDENTIFIED MALE: Are you committing in this interview that you are not going to let any of these banks fail, that no matter what their balance sheet actually looks like they are not going to fail?
BERNANKE: They are not going to fail, but what we can do should it be necessary is try to wind it down in a safe way.
ROMANS: He said he understands public outrage at bailing out the very institutions that have brought the global economy to the brink, like AIG.
BERNANKE: It makes me angry, you know, I slammed the phone more than a few times on discussing AIG. It's just absolutely -- I understand why the American people are angry. It's absolutely unfair that taxpayer dollars are going to prop up a company that made these terrible bets that was operating out of the sight of regulators, but which we have no choice but to stabilize or else risk enormous impact not just in the financial system but on the whole U.S. economy.
(END VIDEOTAPE)
ROMANS: Over the past week, we've seen a more unified message from the administration and now the fed Treasury Secretary Timothy Geithner on "Charlie Rose." Appearances from advisers Larry Summers, Christina Romer, Paul Volcker, and the president met behind closed doors with the nation's largest CEOs last week. The message: We're working on it and eventually the economy will recover. And frankly, the gloom has lifted just a bit. I mean, it's still gloomy but the gloom is lifted just a bit. Not sure if it's because of that message or it happens to be a coincidence.
ROBERTS: Somebody obviously sort of following the suggestion that if you talk down the economy long enough, well, maybe it will just stay down, right?
ROMANS: Yes. That's exactly right.
CHETRY: The other interesting thing, Jill Schlesinger, who's a financial analyst that we had on the show, said that there are some things that are good sound bites but we need more information. We need more details. She was specifically referring to the small business program.
ROMANS: That's true. And G-20 said that they're going to do anything in their power to try to get things back on track and we've heard more of its details. We're going to learn a little bit more as well about the toxic asset program.
ROBERTS: Yes.
ROMANS: How to get these bad toxic assets off the banks books. We should learn that this week or next week.
ROBERTS: Some good interesting news from AIG, though. They were sort of under pressure, forced to give out the names of the people who they've been helping out with those billions of dollars of taxpayer funds.
ROMANS: This is a secret, secret list that we have all wanted to see. Who got the money that AIG got from us? We now know that some of the big banks at the center of the problem of creating and selling these toxic assets got your money from AIG. Among them, Goldman Sachs, Merrill Lynch, Deutsche Bank, Societe Generale. So this is a list that we were not allowed to see for a very, very long time.
We're learning more and more details about who got the money. AIG got the money, had to pay out, you know, the people who took insurance, wrote insurance contracts for and these are among some of them.
ROBERTS: This whole thing too about...
ROMANS: So some of these are coming back for our money now twice.
ROBERTS: And this whole thing too about the bonuses, it's just...
ROMANS: Oh, yes, I mean, it's -- no one think it's a good idea. It is outrage from top to bottom on that.
ROBERTS: Thanks, Christine. CHETRY: Well, the Fed chairman isn't the only one angry over AIG, Americans just like you incensed that their hard earned tax dollars are going to pay bonuses to people on Uncle Sam's payroll. Check out these iReports.
(BEGIN VIDEO CLIP)
GARY KUHRY, IREPORTER: AIG set to pay out $165 million in bonuses to its executives. The group of top 50 executives split $9.6 million. Damn! What the hell is your salary when your bonus is three to four times the average middle-class income?
DAVID SEAMAN, IREPORTER: A bonus is for when a company is doing so well it appears it's in a position to reward its best employees. You guys are not doing well, and now I'm pretty upset.
Let's take a look at your headquarters. Look at that. Pretty swanky, right? Let's do some cost-cutting and have you guys move out to a cheap corporate office park in New Jersey.
(END VIDEO CLIP)
CHETRY: Well, outrage also erupting on Capitol Hill, and now lawmakers are pointing fingers. Elaine Quijano joins us live from Washington now with more on that.
Hi, Elaine.
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Hi there, Kiran. Well, you know, AIG lost a record $62 billion in the fourth quarter last year, but that has not stopped the company from handing out some big bonus checks.
(BEGIN VIDEOTAPE)
QUIJANO (voice-over): Outrage over word that AIG is doling out $165 million in planned bonuses to senior employees despite getting $170 billion in government bailout money.
LARRY SUMMERS, DIRECTOR, NATIONAL ECONOMIC COUNCIL: There are a lot of terrible things that have happened in the last 18 months, but what happened at AIG is the most outrageous.
QUIJANO: In a letter to Treasury Secretary Tim Geithner, the company's CEO, Edward Liddy, explained because of contracts in place before the bailout, AIG's hands are tied and he warned of serious legal as well as business consequences for not paying the bonuses.
In other words, AIG says it could lose its top performers to higher paying job. The company could go under and the $170 billion taxpayer dollars, all for nothing. The Obama administration insists it did lean on AIG to pull back on the bonuses.
CHRISTINA ROMER, CHAIRWOMAN, COUNCIL OF ECONOMIC ADVISERS: We're the first people to be angry, so absolutely, Secretary Geithner has been furious and has been pushing back, urging them to renegotiate this. We're pursuing every legal means to deal with this.
QUIJANO: The administration did get AIG to scale back some of the payments. Still, Main Street outrage is boiling even among tourists just outside the Treasury Department.
BERNARD DIGREGORIO, OBAMA SUPPORTER: I'm flabbergasted.
QUIJANO: West Virginia resident and Obama supporter Bernard DiGregorio says the AIG situation smacks of injustice at a time when he and other taxpayers are worried about making ends meet.
DIGREGORIO: If they have contracts fine, it's like re-mortgage your house. That's what we have to do. Find a way, but don't take it from me. I don't have it anymore.
QUIJANO: Laura Mechanic, another Obama supporter, has some sympathy for the administration, but for AIG, none.
LAURA MECHANIC, OBAMA SUPPORTER: I think it's deplorable. I think it shouldn't be done. Whether there are contracts beforehand or not, I think it just should be times have changed, things have changed and they have to change that.
(END VIDEOTAPE)
QUIJANO: Now an administration official insists under AIG's restructuring agreement, taxpayers will recoup that bonus money. In the meantime, House Speaker Nancy Pelosi wants Congress to examine what legal options are available to recover taxpayer funds -- Kiran.
CHETRY: Elaine Quijano for us in Washington, thanks.
And one of the things that we love to include here on AMERICAN MORNING, you. And today we're launching another tool to get your voice on the air literally. It's our "AMFix" hotline. You can call the show at 1-877-my-amfix. Again, it's 877-692-6349. Leave us a voice mail. Keep it about 30 seconds if you can, with your thoughts on the hot topics of the day, and we're going to start playing them tomorrow on the show.
Also check out our new blog, AMFix, when you get to work, CNN.com/am. We're also on Facebook, we're on Twitter to keep you posted and to weigh in on some of the big stories throughout your day.
ROBERTS: Eight minutes now after the hour, and here's a look at news stories that we're following for you this morning.
A growing numbers of banks are adding new credit card fees. "USA Today" reporting Wells Fargo, Chase and American Express all tweaking the fine print for customers. The fees aimed at offsetting delinquencies.
Iraqi Prime Minister Nouri al-Maliki is saying not so fast to a planned U.S. troop withdrawal, saying forces will only be pulled from areas that are 100 percent secure and under control. Maliki says he told President Obama that any withdrawals must be approved by his government.
And former Vice President Dick Cheney giving his first television interview since the inauguration to our John King. The vice president is attacking President Obama and sticking up for his old boss. We'll tell you what he said just ahead.
Nine minutes now after the hour.
CHETRY: The dirt on "The Donald." Investors who bet big on the Trump name now suing after a resort goes belly up. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: Eleven minutes now after the hour. Let's fast forward to stories that will be making news later on today.
At 12:00 p.m. Eastern, Vice President Joe Biden will address more than a thousand leaders at the firefighters union. House Speaker Nancy Pelosi and Homeland Security Secretary Janet Napolitano will also speak at that conference.
We're also watching for news on the health of Vice President Joe Biden's mother. She was hospitalized yesterday after a fall at her home in Delaware. Mrs. Biden is 91 years old.
And at 11:25 Eastern this morning, President Obama and his treasury secretary will meet with small business owners and community leaders in the White House. They'll be focusing on a new initiative that makes it easier for small business owners to get loans.
Our Suzanne Malveaux live at the White House this morning with the latest on the president's plan. But first of all, Suzanne, the president's top economic adviser sounding a fairly optimistic note yesterday. And interesting, too, if you compare what she said to what then-candidate John McCain said on the campaign trail. Let's listen.
(BEGIN VIDEO CLIP)
CHRISTINA ROMER, WHITE HOUSE CHIEF ECONOMIST: Of course the fundamentals are sound in the sense that the America workers are sound. We have a good capital stock. We have good technology. We know that temporarily we're in a mess, right?
(END VIDEO CLIP)
ROBERTS: The fundamentals of the economy are sound. The latest message from the White House in contrast fairly sharply with what they've been saying up until this point, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: And, John, we know it's a familiar refrain. We heard if from John McCain during the campaign. And aides acknowledge well, yes, that was a huge opening for them. They clearly took advantage of it as painting him as out of touch, but they believe that if you listened to the president, if you listened to Ben Bernanke over the weekend as well as Christina Romer, all of them on the same page talking about that there is hope, there is optimism and that it is affecting the markets here. So they are trying to play that up as much as possible, John.
ROBERTS: How is it then that they can whack John McCain during the campaign for being completely out of touch and they turn around and say exactly the same thing?
MALVEAUX: You know, John, part of it, and aides will acknowledge, is that it's politics. That was a moment during the campaign when they recognized that he said that something that they believed was out of touch with the American people and that they could essentially capitalize off of that.
ROBERTS: Hey...
MALVEAUX: But now they believe that they are trying to influence the markets and that this is -- they've got to come out with a unified message here.
ROBERTS: Yes. The idea of that was then, and this is now, I guess.
Hey, you're also breaking some news this morning on help for small business owners and people who work for them. What have you got?
MALVEAUX: Well, noon is when the announcement is going to happen. We'll see the president as well as Treasury Secretary Tim Geithner. They'll come out. They'll talk about helping small businesses.
We're talking about millions of dollars of taxpayer money. The biggest thing here is greater loan guarantees for banks that are actually lend to these small businesses up to 90 percent of the money, the loan money that they actually lend, will be backed by the federal government. This is aimed at really helping those banks, encouraging those banks to lend more to small businesses.
Secondly, they're going to temporarily eliminate the fee that those banks actually charge to some of those borrowers and that's in the tens of thousands of dollars. They believe that every little bit could help. So, obviously, this is good news to a lot of those people who'll be listening very carefully, John.
ROBERTS: Looking forward to that announcement. And good to see the guy with the leaf blower still got a job this morning.
MALVEAUX: Always, during our live shot, too.
ROBERTS: All right. Thanks, Suzanne. We'll see you again soon -- Kiran.
CHETRY: All right. Well, for the first time since President Obama was sworn in, former Vice President Dick Cheney is speaking out on television. He sat down with our John King defending President Bush. He also had some biting attacks for the new administration's policies.
Kate Bolduan has the highlights for us -- Kate.
KATE BOLDUAN, CNN CORRESPONDENT: John, Kiran, after 40 years in politics and the fourth time he's transitioned out of government, former Vice President Dick Cheney is speaking out.
(BEGIN VIDEOTAPE)
BOLDUAN (voice-over): In his first television interview since leaving the White House, former Vice President Dick Cheney criticized President Obama, telling CNN's John King Mr. Obama is endangering the country by dismantling Bush-era policies on terrorism.
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Do you believe the president of the United States has made Americans less safe?
DICK CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES: I do. I think those programs were absolutely essential to the success we enjoyed of being able to collect the intelligence that led us to defeat all further attempts to launch attacks against the United States since 9/11.
BOLDUAN: Cheney defended the Bush legacy but was conciliatory towards President Obama on Iraq for listening to his commanders on the ground. At the same time, Cheney called Iraq a success.
CHENEY: I guess my general sense of where we are with respect to Iraq and at the end of now what nearly six years, is that we've accomplished nearly everything we set out to do.
BOLDUAN: The former vice president criticized the Obama administration for using the economic crisis to justify and force sweeping changes to health care and environmental policy. Cheney rejected the claim the Bush administration is to blame for the faltering economy even though they came into office with a budget surplus and left with a deficit of $1.3 trillion.
CHENEY: We ended up with two wars in Afghanistan and Iraq. Some of that is still very active. We had major problems with respect to things like Katrina, for example. All of these things required us to spend money that we had not originally planned to spend and weren't originally part of the budget. Stuff happens. And the administration has to be able to respond to that and we did.
BOLDUAN: Cheney may be out of office, but political analysts say he still matters.
BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST: He's trying to make the argument that the Obama administration has actually taken a bad situation and is making it worse. Too much government spending, we're less safe than we used to be, that's a debate that a lot of Republicans would like to have and Dick Cheney is pushing that debate.
(END VIDEOTAPE) BOLDUAN: Cheney said he clashed with President Bush over his chief of staff, Scooter Libby. He says Libby was left hanging in the wind and deserved a pardon after being convicted of perjury, but President Bush refused -- John, Kiran.
CHETRY: Kate Bolduan for us, thanks.
So one of America's biggest employers letting workers go this morning. Looking at why the military is being forced to make some cuts of its own, just ahead.
And also the economy and your emotions. When the market tanks, does your health go south as well? We're speaking with a clinical psychologist in about 15 minutes. Some tips on staying positive in rough economic times.
(COMMERCIAL BREAK)
CHETRY: And welcome back to AMERICAN MORNING. Some of the most popular videos right now on CNN.com, we've been talking about bank implosions, I guess you could say, in the midst of the financial crisis, but this one is literal. Check it out.
Down it goes. This bank building in Houston reduced to rubble. The company says that all of the steel and concrete will be recycled.
If you want to look sharp while possibly in the line of fire, Harrods in London has just the thing -- designer bulletproof clothing. The material, light and flexible enough to create fashionable looks but at the same time strong enough to stop a bullet. Clients include King Abdullah of Jordan and Venezuelan president, Hugo Chavez.
Well, how about a real life Spider-Man? A motorcycle accident left this man paralyzed 20 years ago, but now he can walk again. He was bitten by a brown recluse spider and sent to the hospital. Soon after that spider bite, it apparently helped do something because the nurse noticed that the nerves in his legs then began responding to reflex tests.
And those are the most popular videos. You can check out more if you like more detail on CNN.com -- John.
ROBERTS: That's an interesting story.
But when it comes to real estate, there is no more recognizable name -- Trump. On Mexico's beautiful Baja peninsula, a group of investors put some hefty money into a condo development with the Trump name, but the project went belly up, leaving plenty of people out in the cold.
Guadalupe Mendoza lost a bundle. She's now suing "The Donald" and she joins us now this morning.
Guadalupe, it's good to see you. So let's set the stage here. You invested in this Trump ocean club in Baja. You put $200,000 of your money in as a down payment on $660,000 condo and you lost it off. Why were you attracted to this particular investment?
GUADALUPE MENDOZA, SUING DONALD TURMP OVER FAILED HOTEL DEAL: Simply the name. Donald Trump is an investor who has proven himself in so many real estate ventures across the world. And for an individual looking for an opportunity to secure a wonderful project and make some money with the years to come, it was a very wise choice, I thought, at that time.
ROBERTS: Well, let me ask you this, because would you have invested in this property, the actual name is the Trump Ocean Resort Baja, would you have invested in that property had it not have the name Trump in it?
MENDOZA: Absolutely not. And I would not because the name itself, as I said before, communicates to many buyers an individual who has the financial resources to back up a construction as he has had across the United States and secondly, his name alone would attract an international audience for those of us who were planning to turn our condo into a condo or a rental program that was going to be a part of the condo rental hotel.
ROBERTS: So your plan was to use it as a vacation property, also rent it out and maybe at the end of the day some time down the road sell it, make some money so that you could send your two kids to college?
MENDOZA: Absolutely.
ROBERTS: All right.
MENDOZA: Again, international name, big finances, proven himself internationally. And opportunity to rent the condo when I'm not using it, somewhere along the line sell it and be able to offer my kids a private education if that's what they want.
ROBERTS: OK, so you mentioned the Trump name a number of times. And we contacted the Trump organization, they say it was Trump in name only, that he was not the developer. Here's what they said. "The Trump organization is not and never was the developer of the Ocean Resort in Baja. Trump Marks Baja LLC licensed the Trump name and mark to the developer for the purpose of identifying the project. Trump Marks Baja LLC terminated the license agreement for the project because the developer did not comply with certain terms of the license agreement, including the deadlines to obtain construction financing and begin construction."
So, he was just lending his name to the project. Why should he be held responsible for what happened to it?
MENDOZA: That statement is contrary to what many buyers were provided back in 2006. There were numerous press releases. There were numerous newspaper articles. I personally visited the Trump Ocean Resort Baja visitation center, spoke with the staff and everybody there, particularly tons and tons of documents were informing individuals that this was a joint project between the Trump organization and the Iron Gate and various principals within that organization.
ROBERTS: All right. Well, how much of the responsibility here lies with you? You were an investor buying into an investment property. Isn't it your duty as an investor to read some of the fine print here and if you have read the fine print, would you have not found out that Trump was not actually developing the property but only endorsing it by lending his name to it and I would assume making a whack of money back for doing that?
MENDOZA: And again, I, as many other buyers did, a great deal of investigation, research on the Internet. We spoke with people. We received e-mails, brochures. A lot of written documentation and all stating that Trump and Iron Gate were the developers of this project. And given the financial resources that these two partners had, who had just recently sold a very successful project in Waikiki, the Trump Towers International Hotel in Waikiki, for anybody who had done their homework, done the research, this was a wise investment, an informed investment. And as you read just a couple of months ago, we were informed by the Impulsores (ph) company that Trump was never personally involved and had no investment. That was never told to us.
ROBERTS: Well, I'm sure that losing that much money has had a fairly profound effect on you.
Guadalupe, we'll continue to watch this lawsuit and see how you're doing. Thanks very much for being with us this morning. It's good to talk to you.
MENDOZA: Thank you for the opportunity.
ROBERTS: All right. Twenty-six minutes now after the hour.
CHETRY: Free advice for your well being. Dr. Joy Brown on surviving the economy and turning your stress into something positive.
You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
ROBERTS: Well, to train for war, and even they don't want to tackle this job market. With the economy in shambles, the military is now being forced to thin the ranks and not offer re-enlistment to many soldiers. Pentagon correspondent Chris Lawrence joins us live this morning from Washington.
Everybody even the military being hit by hard times, Chris.
CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Yes, John, more sailors want to stay in the Navy than ever before at the same time that Congress is cutting its numbers. It means some really tough new re-enlistment policies that will offer advancement to some and end the careers of thousands of others.
(BEGIN VIDEOTAPE)
LAWRENCE (voice-over): This could be the last time Amanda Siren packs her sea bag.
AIRMAN AMANDA SIREN, U.S. NAVY: When they told me that I couldn't re-enlist, it was like a kick in the face.
LAWRENCE: Siren works on aircraft weapons but too many other sailors do the same thing. The single mom is coming to the end of her first tour and her family tells her how bad the economy is.
UNIDENTIFIED FEMALE: They want me to stay in the Navy so I don't get laid off as a civilian, but the Navy is laying me off as well.
LAWRENCE: She's one of the many sailors facing the military's rough new reality.
VICE ADM, MARK FERGUSON, CHIEF OF NAVAL PERSONNEL: Where we see individuals re-enlisting at greater than our required levels.
LAWRENCE: It's the highest retention rate in ten years. While private companies cut workers, some Navy jobs have doubled the needed personnel.
(on camera): And at one level, machinists mates are 389 percent overmanned. That means there's nearly four sailors for every one the Navy needs.
(voice-over): So the Navy is making it much harder to stay in. One official says, "The measures we've put into place are based on performance. We're using a scalpel, not a hatchet."
CHIEF PETTY OFCR. WILLIAM HARDING, U.S. NAVY: I have no concerns, I think it's a great thing.
LAWRENCE: William Harding made the high rank of chief in 12 years. He says the Navy should be run more like a corporation.
HARDING: If you don't perform in the outside world, you get a pink slip. Well, that's pretty much where we're at in the Navy.
LAWRENCE: Some good sailors will be forced into new jobs but the Navy admits not all of them will be allowed to stay. Even though no bonuses are offered for her job, Siren would re-enlist in a heartbeat if she could.
SIREN: The money has nothing to do with it. I want to serve my country and I can't.
(END VIDEOTAPE)
LAWRENCE: In about 3,000 sailors will have to go this year and Congress has order the Navy to reduce its force by another 3,000 soon. At the same time, Congress is adding troops to the Army and the Marines to fight those wars in Iraq and Afghanistan. John.
ROBERTS: So how might this with the Navy affect force readiness?
LAWRENCE: Say it that again? ROBERTS: How might this with the Navy affect force readiness, the fact that they're not re-enlisting a lot of people?
LAWRENCE: Well, what it is, John, is they have a certain number of people that are tasked to Iraq and Afghanistan pulled from all kinds of units. They were supposed to lose about 6,000 people this year but because of those commitments in those wars they were able to move some money around and at least keep 3,000 jobs, but they still have going to deal with that next year.
ROBERTS: All right. Chris Lawrence for us this morning. Chris, thanks so much.
It's coming up now at 32 minutes after the hour. Here's what we're following for you right now. Tales of alleged torture, a top secret CIA presence. "The Washington Post" says the Red Cross conducted a secret report about the treatment of al Qaeda suspects. It says they were exposed to beating, sleep deprivation and waterboarding. The CIA declined comment. One U.S. official says it's important to remember that the report lays out claims made by the terrorists themselves.
Wall Street going for a five day-winning streak today. Overseas, stocks in Asia are up, hitting one month highs after Fed chairman Ben Bernanke says he sees the recession ending and ending this year.
And actor Ron Silver is being remembered this morning for his contribution as both an artist and political activist. Silver died on Sunday after a two-year battle with cancer of the esophagus. He was an Emmy nominee for his recurring role on "The West Wing." He also won a Tony award and appeared in many films. Ron Silver was 62. Kiran.
CHETRY: So sad. Well, with Wall Street going for a five day winning streak as John just mentioned. The White House is changing its tone a little bit expressing some more confidence in our economy but will it really do anything to calm financial fears. I'm joined now by clinical psychologist, Dr. Joy Browne. She host the nationally syndicated call-in radio show that airs daily. Welcome. Good to have you with us.
You said that you have a pretty large audience in Detroit. As we know, Detroit is sort of a microcosm of what a lot of towns and cities have been going through.
DR. JOY BROWNE, CLINICAL PSYCHOLOGIST: Well, they've been hit at a curve. They've been worrying about this for about a year and a half, not six months.
CHETRY: So what do your callers say about whether or not it helps or hurts when our leaders, our likely leaders speak, either positively or negatively about the state of affairs.
BROWNE: Kiran, to be quite honest and let me speak specifically, I don't think it makes much difference. We figure that politicians are just saying whatever the (INAUDIBLE) on the other hand, positive is probably in the long run and maybe the short one. It's kind of like going to your doctor with symptoms and the doctor says don't worry but if the doctor says take two aspirin and you'll feel better and if you don't in 15 minutes, call me back. Then you believe them in something specific.
So I think if we really want some confidence out of Washington, we need specifics. (inaudible) Ben saying this morning, by the end of the year everything will be better. We want to believe that but I don't think we do believe it until we see some signs that he's predicted.
CHETRY: And the other interesting thing, the politicians came out last week. Barack Obama, the president as well as others, don't follow the stock market. The stock market is almost like a daily tracking poll but people's up and down as we've seen from even studies that they've done are highly affected by whether or not stocks go up and down.
BROWNE: No question. The Dow is falling. The Dow is falling.
CHETRY: Right.
BROWNE: You need (INAUDIBLE). I think it's kind of like when you're on a diet. When you and I are on a diet, you check your weight every 15 minutes. It's going to give you false positives, false negatives. I think what you have to do is probably not watch the Dow at all. I know we all feel better when it goes up but it has nothing to do with anything. And I think that's what we have to remember that you want to focus on what you can affect, not on what you cannot affect because it will just make you anxious.
CHETRY: It's interesting that you talked about three categories of people. The people who literally have not lost their jobs yet, but live in so much fear that it's affecting them as if they have.
BROWNE: We know that even those of us who feel that our job is OK worry about. It's water cooler discussion. And what it does is just to increase the anxiety. If you really want to focus on your job, get in early, do a good job and ask your boss what the likelihood is, have your resume up to date but free form worry especially if it makes you crazy at work is not very productive.
CHETRY: Then the people who let's say who already have lost their jobs. They are the victims of these layoffs, and they feel I'm searching, I've given up hope. It's been six months. It's been a year. I can't get rehired.
BROWNE: Well, there is that feeling of contagion if your next door neighbor lost their home, are you next? But I think again, we have to look at specifics, look at your budget. Look at your house. Look at your income. Look at your savings. Because this is not a time to look at the global. This is a time to look at your specifics again.
CHETRY: How do you avoid it from spilling over to your domestic life, fighting with your spouse? BROWNE: That's a real tricky one and I think what we have to do is not hear blame. I'm hearing a lot on the program of women who taught they could stay home with their kids and their guy lost their job or that he's not looking hard enough for a job or he invested in a stock. So there's a lot of blame going around. And I think that's obvious and not very productive either. You know, when things are going well, we're really proud of ourselves.
We also have to understand that number one, women feel the stress more interestingly enough but men feel their identity is really much more closely tied into their work than we do. So, instead of trying to make your man feel guilty about losing this job, is not really very smart.
CHETRY: No. That's not going to help anything. All right. Dr. Joy Browne, always great to have you with us.
BROWNE: Nice to have you.
CHETRY: Thanks so much for being here this morning.
BROWNE: Don't watch the Dow.
CHETRY: I won't.
BROWNE: Deep cleansing breath.
(LAUGHTER)
CHETRY: John.
By the way, one of the things we learned to do here in AMERICAN MORNING is hear from you're the viewers. So today we're launching another tool to get your voice in the air, it's our "AMFix" hotline. Call the show 877-MY-AMFIX, leave us a voicemail with your thoughts on the hot topics of the day and we're going to start including some of your comments on the show tomorrow. You can also blog "AMFix" when you get to work, CNN.com/am. You can follow us on Facebook and Twitter. John.
ROBERTS: It was kind of nice to watch the Dow when it goes up.
CHETRY: Yes. Exactly. You still watch it when it goes down.
ROBERTS: Exactly. If it turns around, turn it on.
Coming up on 37 minutes after the hour. Here's a look at what's new this morning. The former fiancee of Bristol Palin, daughter of Alaska Governor Sarah Palin is speaking out this morning. Levi Johnson told ABC News he didn't feel mature enough to stay in the relationship. So, he's leaving. He says he'll give anything for the son that he had with Palin.
A hearing set this morning in Los Angeles for a case surrounding Lindsey Lohan after police put out an arrest warrant on the actress. Her attorney calls the whole thing a mistake. The warrant apparently stems from Lohan's 2007 convictions for drunk driving, according to police.
And it wasn't exactly, shall we say, model behavior. Thousands of women hoping for a spot at "America's Next Top Model" suddenly pushing, shoving and in some cases, brawling, as they waited to get into an audition.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning. They are calling it the top model melee. Take a look at this. Thousands of women hoping for a spot in "America's Next Top Model" caught in a stampede as they waited to audition in New York City and some serious fall out from it all. Our Jason Carroll working this one for us this morning. Good morning to you.
JASON CARROLL, CNN CORRESPONDENT: Good morning to you. Tyra Banks and the producers still trying to figure out what exactly started all this. there are several versions of how it all happened. I want you to take a look at some of the video that we've got for you here.
It was a frightening scene, all caught on tape by a security camera. It may have started after the crowd spotted a smoky car near them. Someone reportedly yelled the car is going to blow. Then there is panic. There is pushing, shoving and screaming.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Everyone started running to one direction which was this way. So we ran too.
UNIDENTIFIED FEMALE: They were running around the corner. People were dropping their chairs, their blanket, pushing, cursing. We'll it's crazy, pandemonium.
(END VIDEO CLIP)
CARROLL: Police arrested three people and charged them with disorderly conduct and inciting a riot. They also shut down the audition. Six people were hurt, none seriously.
Late last night, we heard from the host and producer of the show, Tyra Banks, who said, "We are concerned by the events that occurred Saturday afternoon in the vicinity of the New York City casting call for the next cycle of "America's Next Top Model." At this time, we still don't know all the details of what happened or what triggered the incident. New York's mayor Michael Bloomberg said the show producers should have called police the moment the crowd started getting large.
Saturday's casting call was open only to women shorter than 5'7", much shorter than the industry standard which may explain why so many people showed up there. More auditions are planned for later this month, including stops in Dallas, Chicago and Los Angeles. Hopefully they learned a security lesson.
ROBERTS: So somebody thought it would be fun to scream fire in the middle of all this crowd.
CARROLL: That's just one story. Another story was that there was a fight that started. And that got the crowd going and someone shouted "there's a gun," a lot of different stories that are sort of circulating about how this all happened.
ROBERTS: Definitely a good lesson on crowd control there and inviting in the NYPD who is skilled at this.
CARROLL: Not a bad idea.
ROBERTS: Jason, thanks so much -- Kiran.
CHETRY: Well if you're allergic to peanuts or your child is, the cure for what ails you may just be peanuts. We got the shocking must results of a brand new medical study to tell you about.
Also, "THE ROAD TO RESCUE," a CNN survival guide, everything you need to know to make it through some tough times. It's 43 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. Happy Monday. All this week on CNN, an unprecedented television event, "ROAD TO RESCUE." It's a CNN survival guide. Well, we're going to be taking an in-depth look at some of the biggest stories of our time, of course one of the biggest of our time, the economy.
We have some good news to report this morning after a solid performance last week on Wall Street. European and Asian stocks are all higher this morning. Can Wall Street keep that rally going? Our Christine Romans is looking ahead for us. We're allowed to call it a rally now, right? Because it's been four days.
ROMANS: It is a rally. It's been four days and...
CHETRY: She told us we couldn't call it that before because there's only one day.
ROMANS: Because I was too afraid. And they finally put it together. And now you got, it could be five days in a row for the Dow. The Dow is up nine percent last week. We haven't seen that, folks, since last November. I'll just say that I won't say the gloom is lifted but the gloom is not quite so thick over the past week.
Either by accident or by design because you've had a unified message coming out of Washington really about how we're putting together the pieces to try to have a recovery, the Fed chairman on "60 Minutes" last night saying that for the second time saying we could see a recovery beginning sometime later this year.
And so, you got Asian stocks up sharply here today. Three percent gain for the Hang Seng and European stocks are up. There are some optimism about some banking reports coming out of Europe. That's helping. Anytime you have signs that the banking sector is doing well, you have investors who breathe a sigh of relief and the Dow Jones futures are up about 79 points now. That would put the Dow above 7200 if that we're to follow through during the day.
So again we've taken the edge off the desperation of the past week, but we still have a lot of work to do. Make no mistake about it, but for some reason they're able to put together a little bit of optimism here.
ROBERTS: Isn't that a good thing, too.
ROMANS: It is. We will take whatever kind of optimism and confidence we can get.
ROBERTS: Absolutely. Thanks, Christine.
Forty-seven and a half minutes after the hour. Here's the new stories that we're tracking this morning. The crew of the space shuttle "Discovery" on its way to the International Space Station this morning set to arrive tomorrow to deliver one last set of solar wings for the space station. NASA says "Discovery's" launch was flawless.
(BEGIN VIDEOTAPE)
CHETRY (voice-over): Cracking peanut allergies using peanuts. How the very food that puts people in danger may cure them. You're watching the most news in the morning.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. Doctors tracking a new study are fighting fire with fire. They are actually trying to cure kids with severe peanut allergies by giving them small doses of peanuts. For more on this, we turn to our senior medical correspondent Elizabeth Cohen. You this, this fully gave me pause when I first heard the study. I told you before that my daughter is allergic to peanuts and even the tiniest, tiniest bit little tiny bit of peanut will set off a pretty severe reaction.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Right, Kiran. This sounds like a crazy idea to give a child, like your daughter who is severely allergic to peanuts, peanuts to help them get over the allergy but that's exactly what pediatricians at Duke University did and they found, this is for the children that they studies, that it worked.
Let's take a look at what they did. They took children with severe peanut allergies, so much so that even one-tenth of a peanut could really get them sick and they gave them 1/1,000th peanut in a powder form and then they upped the dose every two weeks. By the end of eight months, these children were eating, on average, 15 peanuts without getting sick and they could even look in their blood and see that they were not getting an allergic response. Now, Kiran, it's really important to say this right now. You do not want to try and this at home. This was done under very controlled circumstances. This is something that a doctor has to do. You don't want to start by giving your child little bits of peanut butter if your child is allergic. That would be a terrible idea.
CHETRY: You said when testing their blood, they found that they weren't even, I guess, producing, right, the actual reaction within them. So are they cured?
COHEN: You know, some of the children, actually they say, are cured. There are about five children out of the 29 in the study where doctors say hey have peanut butter and butter jelly sandwiches. You know, eat as much as you want. The other children, they didn't feel that way. The other children, the doctor said, look, we know they can handle approximately 15 peanuts but they still didn't want them to go out and eat as many peanuts as they wanted.
CHETRY: All right. So the study suggests that they can in some case build up a tolerance, if anything?
COHEN: That's exactly what happens.
CHETRY: Elizabeth Cohen, thanks so much.
COHEN: Thanks.
CHETRY: Fifty-three minutes after the hour. By the way, you can go online and see what else Elizabeth and Dr. Sanjay Gupta are working on for you at cnnhealth.com. You can read the latest medical headlines or check Dr. Gupta's blog.
Again, the address is cnnhealth.com.
(BEGIN VIDEOTAPE)
ROBERTS (voice-over): Taking it to AIG.
UNIDENTIFIED MALE: Look at that. Pretty swanky, right.
ROBERTS: Outraged i-reporters tired of paying for their failure.
UNIDENTIFIED MALE: Let's do some cost-cutting and have you guys move out to a cheap corporate office park in New Jersey.
ROBERTS: Plus, your money is no good here.
LOLA OGUNNAIKE, CNN ENTERTAINMENT CORRESPONDENT: Free bag. Free bag. Free. Free.
ROBERTS: The marketplace not far from Wall Street where everything costs nothing.
UNIDENTIFIED FEMALE: One person's junk could be my treasure.
ROBERTS: You're watching the Most News in the Morning. (END VIDEOTAPE)
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning. People often go to Craigslist to post items for sale or trade and now the post is becoming much more basic, even desperate. It's a reflection of the tough economic times out there. CNN's Thelma Gutierrez shows us the new reality on Craigslist.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Please don't judge me. I'm very embarrassed to ask anyone for help.
UNIDENTIFIED MALE: Five children and my wife and I are about to lose our apartment.
UNIDENTIFIED MALE: If you need any odd jobs done.
THELMA GUTIERREZ, CNN CORRESPONDENT: They put it all out there in black and white, call for help on the Internet. Jill Gardner is one of those people. She says she's been out of work for six months. Gardner used to work in an oil refinery, wearing coveralls and a hard hat. Now she's looking for a job in the hotel industry and she needs business suits that she can't afford to buy.
JILL GARDNER: I'm in need of women's clothing for size 10/12. Have job interviews, no good clothes. Please help if you can.
GUTIERREZ: Gardner says it was tough to post the ad on Craigslist.
GARNER: It's not easy. Because I've never asked for things like that before and it's hard not being able to provide for myself.
GUTIERREZ: Ernie Casias (ph) has been there, too. Casias is a former banker, once lived the good life processing loan applications. After he lost his job, he had to move in with his mother. Now he is faced with having to sell off his former life.
ERNIE CASIAS: No more deluxe work. No more (INAUDIBLE).
GUTIERREZ: But Casias needs the money, and Craigslist has lots of viewers.
CASIAS: It took a lot for me to put that ad on Craigslist, because I had to change -- a whole lot of people. Driving expensive cars and having expensive suits. This is real.
GUTIERREZ: But Casias is encouraged. He's already had three interviews from his ad.
UNIDENTIFIED FEMALE: Hey, thank you.
UNIDENTIFIED FEMALE: You're so welcome! GUTIERREZ: For Jill Gardner, the ad paid off. Bonnie Sue Robin (ph), a paralegal, saw Jill's request for clothes and gave her a business wardrobe.
UNIDENTIFIED FEMALE: We'll keep in touch so that I can fill out and we can have a drink to celebrate when you get your new job.
GARDNER: I definitely, definitely and I'll buy.
GUTIERREZ: Thelma Gutierrez, CNN, Los Angeles.
(END VIDEOTAPE)
