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American Morning
Senator Chris Dodd Apologizes on AIG Bonus Bill; President Obama Takes Blame for AIG Mess; AIG CEO Grilled by Congress; Fed Action Lowers Mortgage Rates and Saves Dollars; Obama to Appear on Leno Show; Fed's Trillion-Dollar Stimulus; Actress Natasha Richardson Dies Suddenly; College Student Doubles as CEO
Aired March 19, 2009 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Welcome. Glad you're with us on this Thursday, March 19th. Kiran Chetry along with Christine Romans. Good to see you this morning.
CHRISTINE ROMANS, CNN CO-ANCHOR: Good to see you.
CHETRY: Christine is in for John today, which I'm glad that you're here because, of course, we're doing this "ROAD TO RESCUE" all this week.
ROMANS: That's right.
CHETRY: And we have a lot to talk about and you have to help us figure out some of those.
ROMANS: There's a lot of stuff happening with your money and a lot of things that really matter today to your money so a lot to talk about.
CHETRY: Right. If you thought the AIG bonus fallout was big, we have so much more.
(CROSSTALK)
ROMANS: We got more. Right.
CHETRY: Exactly. All right. Well all this week as we said, CNN's special event "Road to Rescue" and we're taking aim at the economy. It's a story that has a huge impact, of course, on the country as well as your families. Over the next three hours, we're going to tell you stories. We're going to talk to guests, and we're going to offer up some tips meant to help you weather this storm.
We have Gerri Willis with us and Stephanie Elam, as well as the entire CNN money team here and ready to go. And unlike a lot of other shows, we are turning to you, our viewers, to help drive our coverage.
We want to hear what you're concerned about. We want to hear your questions about the economy, outrage as well. So call your -- call our show hotline. It's 877-my-amfix or you can also head to our Web site at CNN.com/amfix. Send us an e-mail. You can also join the conversation on our twitter page which is also cnn.com/amfix.
With that said, we're going to get right to it, the big stories will be breaking down for you in the next 15 minutes.
A good time to buy? Well, this morning mortgage rates are down after a bold move by the government to try to jump-start the economy with a new trillion-dollar investment. This is a story that people will be talking about today and it could have big implications for your household, so we're going to break it down for you.
Also, he is saying sorry this morning. We're talking about Senator Chris Dodd, doing an about-face and owning up to actually helping pave the way for those huge bonus payouts at AIG. The senator is making his confession only on CNN.
And into the hot seat, the AIG bonus uproar brings the CEO of the bailed out insurance giant before Congress. He has a somewhat surprising message for his executives who collected big bucks, saying do the right thing, give some of that money back. And we are learning this morning that some, indeed, are saying they're going to give that bonus money back. Full coverage of that story this morning here on AMERICAN MORNING.
ROMANS: Kiran, we begin with big news breaking right now here on CNN. Our political unit getting answers about bailed out insurance giant AIG and how it got away with giving millions of dollars in executive bonuses. It turns out the company got a big hand from Washington, specifically the Obama administration, the democratic senator, Chris Dodd. And believe it or not, the political process that paved the way for those massive payouts started as an attempt to put the brakes on big corporate bonuses.
CNN's Dana Bash joins us with this story. It's a story that's already making the most popular list on CNN.com.
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Kiran and Christine, it wasn't easy but we uncovered an intriguing case here in Washington of who done it.
(BEGIN VIDEOTAPE)
BASH (voice-over): All this outrage about AIG's bonuses from the White House...
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: People have a right to be angry. I'm angry.
BASH: ... to Capitol Hill.
SEN. MAX BAUCUS (D), FINANCE COMMITTEE CHAIRMAN: The country is angry. Individual Americans are angry. I am angry.
BASH: Yet Congress passed the bill last month that the president signed into law allowing AIG to keep its bonuses, and for days, no one would 'fess up about who was responsible for a mysterious loophole that let that happen. But CNN solved the mystery. It was the Obama Treasury Department and Senator Chris Dodd. Here's what happened.
Last month's massive stimulus bill included a Dodd measure to strictly limit executive bonuses, but slipped inside at the last minute an exemption for bonuses agreed to on or before February 11th, 2009. That allowed AIG to go ahead with its controversial bonuses. On Tuesday, Dodd adamantly denied to CNN that he was responsible for the exemption.
SEN. CHRIS DODD (D), BANKING, HOUSING, AND URBAN AFFAIRS CMTE. CHAIRMAN: When I left the Senate it was not in there. So when I wrote the language there was no such language like that. I can't point a finger at someone who offered the change at all.
BASH: But the next day, an official at the Treasury Department flatly contradicted Dodd, telling CNN his office did know and that it was Obama Treasury officials who pressed him to make the change, because they worried that his measure to limit executive bonuses in preexisting contracts like AIG's would face a legal challenge.
CNN took that information to Dodd. He reversed course and admitted he did make the change.
(on camera): You did agree to modify this to put that clause in.
DODD: The alternative was losing in my view the entire section on executive excessive compensation. Given the choice, this is not an uncommon occurrence here, I agreed to a modification in the legislation reluctantly. I wasn't negotiating with myself here. I wasn't changing my own amendment. I was changing the amendment because others were insisting upon it.
BASH (voice-over): Dodd insisted he made the change at the behest of the administration, but admitted he was wrong in initially denying his role.
(on camera): You were very adamant yesterday, very adamant that you didn't know how this changed about in there. And now you are saying that your staff (ph) did work with the administration.
DODD: Well, going back and looking, obviously, I apologize.
(END VIDEOTAPE)
BASH: Senator Dodd says he is not trying to protect AIG. In fact, he insists that when this was negotiated a month and a half ago, no one believed we would "be sitting here talking about AIG and the bonuses" -- Kiran and Christine.
CHETRY: Wow. Dana Bash for us this morning, thanks.
Well, President Obama says that the AIG bonus mess is his to clean up even if he didn't make it. Speaking at a town hall meeting in California, the president said he'll take responsibility for bonuses given to executives while the company was getting government bailouts. He also defended his administration's handling of the AIG situation.
(BEGIN VIDEO CLIP) OBAMA: I know a lot of you are outraged about this. Rightfully so, I'm outraged, too. It's hard to understand that a company that's relying on extraordinary assistance from taxpayers to keep its doors open would be paying anybody lavish bonuses. It goes against our most basic sense of what's fair and what's right. It offends our values.
We didn't draft these contracts. We've got a lot on our plate, but it is appropriate when you're in charge to make sure that stuff doesn't happen like this. So we're going to do everything we can to fix it. So for everybody in Washington who's busy scrambling, trying to figure out how to blame somebody else, just go ahead and talk to me, because it's my job to make sure that we fix these messes, even if I don't make them.
(END VIDEO CLIP)
CHETRY: All right. Well, a day after blasting AIG's CEO, members of Congress are out to get some relief for taxpayers. In just a few hours, the House is expected to pass a bill to recoup most of that $165 million in bonuses paid to AIG executives. The bill would impose a 90 percent tax on bonus pay for executives earning more than $250,000 and apply not just to AIG but to all banks and companies that have received big government bailouts.
On Capitol Hill today, AIG's CEO, Edward Liddy, stepped into the lion's den, so to speak. He asked company executives to return that money and told lawmakers why he believes that the bonuses were necessary.
(BEGIN VIDEO CLIP)
EDWARD LIDDY, AIG CHAIRMAN & CEO: Payments were made to employees in the financial products unit that caused many of AIG's problems. And Americans are asking quite simply, why pay these people anything at all? Here's why.
I'm trying desperately to prevent an uncontrolled collapse of that business. This is the only way to improve AIG's ability to pay taxpayers back quickly and completely, and the only way to avoid a systemic shock to the economy that the U.S. government help was meant to relieve.
This morning I've asked the employees of AIG financial products to step up and do the right thing. Specifically, I've asked those who received retention payments in excess of $100,000 or more to return at least half of those payments. Some have already stepped forward and offered to give up 100 percent of their payments. The action we are taking today is a result of discussions with numerous parties, many of you, including Attorney General Cuomo of New York.
(END VIDEO CLIP)
CHETRY: Liddy also went on to say that he knows the public's patience is wearing thin.
ROMANS: All right. There's new developing news this morning about a new plan from the Federal Reserve to kick start the economy. The Fed announcing it's injecting $1 trillion into the economy, buying up treasury bonds and mortgage securities. Now that's nearly -- put it in perspective. That's really double the cash spent by the stimulus after tax breaks and the good news for you, that's pushing mortgage rates down right now.
Zillow.com showing that rates falling as low as 4.68 percent. Stephanie Elam here to break it down for us this morning.
It was amazing, Stephanie. Yesterday the Fed announced this move to inject all this money into the system to try to, you know, get liquidity going as we say in this system and immediately the 30-year fixed rate mortgage fell so sharply, right away.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Right away. And the funny thing also is that yesterday was Fed day. And you might not have noticed it because of all the AIG coverage but this is something we pay attention to. When the Fed comes out and tells us about interest rates, we knew that it was in this low range.
That probably wouldn't change but they're showing that they have more tools in their tool bag to go ahead and make things happen. So $1 trillion, let's take a look at how they're breaking it down.
$300 billion, the Fed's going to use to buy up long-term treasuries. The goal there is to get credit moving again. That's the first thing. Then this other $750 billion, they're looking to buy into mortgage-backed securities. The goal there to lower mortgage rates and as you just heard Christine said, immediately we saw those rates fall.
We're thinking about from five percent down to 4.68 percent. That's from zillow.com who charts these kinds of things. So that's one of the first things that we did find.
Just in case you're wondering what does that mean to me? Let's say you have a $200,000 mortgage. Right now, you could be paying $1,300 a month. That's seven percent, right? There you go.
If this goes down to 4.68 percent in your case, that takes you just above $1,000 a month, so you're saving nearly $300 a month. So it would make a big difference. Obviously, it's important to keep in mind that to refinance it does cost money so this may not be exactly the best option for someone in this situation but it gives you that idea.
CHETRY: Right. And also -- so if you're relatively new, if you have a relatively new loan, it might be a better idea if you're already like 15 years into it.
ELAM: Right. It may not be. That's another thing to keep in mind.
CHETRY: Another thing I was wondering, what's the downside of buying up all these mortgage-backed securities? I mean, it seems like, OK, that's such a great idea. Why didn't we do it a month ago? ELAM: Well, for one thing, it automatically affects the dollar, because basically they're just printing money and putting it out there and when that happens, the dollar value goes down. So you're going to see a lot of foreign traders, foreign exchange traders looking at this going the dollar's value is now weaker. But in the treasury's mind, this is all to free up credit, get things healthier so that we can move on and then worry about strengthening the dollar later.
ROMANS: The attention is on the $165 million for AIG, but this is a trillion dollars yesterday.
ELAM: Yesterday.
ROMANS: It immediately affects people.
ELAM: And really, people don't really understand how huge it is but it's important.
ROMANS: All right. Thanks, Stephanie.
CHETRY: That's why we have you.
Also new this morning, a brand-new snapshot of the economy and also how it's impacting particular areas of your life. Check out this new CNN/Opinion Research polls. They were just released in the last five minutes.
When it comes to being able to make the monthly mortgage payment, 50 percent of people are confident they can pay the bill. That means 50 percent are not. That's down eight percent from last year.
Also, paying for kids' college tuition. Only 24 percent of parents now say that they're very confident they can make that happen. Forty percent are saying they're not confident. And interestingly, tuition and mortgage payments are two of the biggest topics we've been hearing about on our new show hotline, 877-my-amfix. Let's listen to what a couple of callers said.
(BEGIN VIDEO CLIP)
QUESTION: I'm calling from Florida and this is Kathy. My granddaughter is trying to work two jobs part time to help pay for her college loan, and I feel very bad that they'll bail out the banks and the government and all the other automobile dealers and everything, but they will not help the college loan kids.
QUESTION: This is Gwen from Indiana. Let me tell you, the government needs to stand in and stop these banks from foreclosing on people. Why are the people being penalized for loss of jobs when that upper crust rich people have stolen so much from us and people are losing their homes?
(END VIDEO CLIP)
CHETRY: All right, those are just a couple of the comments coming in. Our hotline, by the way, open 24 hours a day. If you like to weigh in, 877-my-amfix.
And a reminder we're also online this morning. When you're away from the TV, you can head to the Web site CNN.com/amfix. You could also link to our twitter page and Gerri Willis has logged on. She's been answering questions all week and she'll continue to do so throughout the show and later on. So you can ask a question and Gerri, you probably have one today if you're thinking about whether or not it makes sense for to you refinance because of these new rates.
ROMANS: A quick check now on some other stories new this morning as our "ROAD TO RESCUE" special continues.
Bernie Madoff could be back in court this morning. A federal appeals court will decide whether Madoff should remain in prison until he's sentenced in June.
Meantime, his longtime accountant, David Friehling, is free this morning on $2.5 million bail. Friehling was arrested yesterday for fraud, accused of helping Madoff cheat thousands of people out of billions of dollars.
The entertainment world is mourning the sudden and tragic death of film and theater star Natasha Richardson. A publicist for husband, actor Liam Neeson, says the family is "shocked and devastated."
Richardson fell and hit her head during a skiing lesion Monday in Quebec. She seemed fine after the fall but about an hour and a half later she complained of a headache and was taken to a hospital. She was then transferred to New York City where she died yesterday.
The astronauts aboard the International Space Station getting ready for another spacewalk this morning. Today, they'll start the process of adding new solar wings to the decade old space station by attaching specialized framework to the hull. The wings will be opened up for the first time tomorrow.
And the president holding a second town hall meeting today to push his economic agenda. Also on the schedule, a sit-down with Jay Leno on "The Tonight Show." We'll have a preview live from Washington.
It's 13 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Sixteen minutes past the hour and we want to fast forward now to some of the stories that will be making news here on CNN later today.
Our Ali Velshi is getting an exclusive behind-the-scenes look at the Obama Treasury Department. He's going to be sitting down one-on- one with an interview with Treasury Secretary Timothy Geithner. The timing on this couldn't be better, so hopefully we're going to find out more about what the secretary of the treasury has to say about everything going on, including AIG.
Well, at 12:30 Eastern, Vice President Joe Biden will attend a town hall meeting. It's at a bus company plant in St. Cloud, Minnesota. He'll talk about the administration's effort to strengthen the middle class. Biden will be joined by Education Secretary Arne Duncan and other cabinet members.
And President Obama is going to be pushing his economic plan again today in California. He'll appear also on "The Tonight Show With Jay Leno" later on. The president will be sharing the stage with country music legend Garth Brooks. No duet I'm sure.
White House correspondent Suzanne Malveaux is tracking the story live from Washington this morning. Can you imagine being Garth Brooks. Oh, well, we booked you and the president is also going to be here.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Oh, yes, by the way, the president.
Well, the idea, of course, not to be singing the blues. The president is taking his show on the road, selling the economic stimulus plan, the budget. He's really trying to reach out to folks outside of D.C., convince them that he knows what he's doing, he gets their concerns. But he is banking on his popularity and maybe even his humor to deliver this message, and some believe it's a risky strategy.
(BEGIN VIDEOTAPE)
OBAMA: For the Bears to go all the way, baby.
MALVEAUX (voice-over): As candidate Obama, he was a big hit.
JON STEWART, HOST, "THE DAILY SHOW": They're applauding the spirit of cooperation.
SEN. JOHN MCCAIN (R), ARIZONA: I thought I might try a strategy called the reverse maverick.
MALVEAUX: Following the footsteps of many presidential hopefuls, going outside traditional media to attract attention and votes. Like Bill Clinton on "Arsenio Hall."
GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: Number seven. Make sure the White House library has lots of books with big print and pictures.
MALVEAUX: George W. Bush on "The Late Show With Letterman."
RICHARD NIXON, FORMER PRESIDENT OF THE UNITED STATES: Sock it to me.
MALVEAUX: And Richard Nixon on "Laugh-in." In 1968, this was considered a real watershed moment for politics and TV entertainment. But Obama's appearance today on "The Tonight Show With Jay Leno" will be the first time a sitting president is in the hot seat on a comedy show, not to campaign, but to answer questions about how he's governing. ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We don't look at it as a process of demonstrating the president's sense of humor. We look at it as a way of discussing the economic situation that we find ourselves in.
MALVEAUX: On "The Tonight Show," the president's message can immediately reach five million viewers and without the filter of a critical press. But his appearance poses risks.
HOWARD KURTZ, HOST, CNN'S "RELIABLE SOURCES": He has to be very careful about his tone because if he upset him too much and seems to be having too good a time, there's going to be quite a contrast there with the pain that people are feeling right now with the crumbling economy.
(END VIDEOTAPE)
MALVEAUX: So how the president communicates is really being scrutinized along with what he says because the economic recovery is very much wrapped up in how people feel about their future, whether they have confidence in investing and spending again and Americans are looking to him for those cues. But Obama is not only doing the comedy circuit. He is going to sit down for an interview with "60 Minutes" this weekend and I imagine, Kiran, that he is going to get some tough questions.
CHETRY: All right. Suzanne for us. Yes, absolutely, we look forward to seeing the highlights. That's for sure. All right. Thanks so much.
MALVEAUX: Thanks, Kiran.
ROMANS: You know, the president can multitask, this we know.
President Obama isn't letting off the economic stress keep him from making his NCAA tourney picks. He was filling out his presidential bracket on ESPN Wednesday. The president's final four, in case you're wondering, Louisville, Pittsburgh, Memphis and North Carolina. He likes Louisville and North Carolina to play in the title game and has North Carolina as the national champion.
Now, we're taking your questions, giving you answers all this morning that you can use, not about tourney picks, however.
CHETRY: If you want to, go for it.
ROMANS: You could try, but don't ask me for that advice.
It's our "ROAD TO RESCUE" coverage. Gerri Willis, Stephanie Elam, they're going to be here to help us out. You can call 1-877-my- amfix. You can also go to CNN.com/amfix.
It's 19 minutes after the hour.
(COMMERCIAL BREAK) ROMANS: All right. Welcome back to a special "ROAD TO RESCUE" edition of AMERICAN MORNING. We're taking dead aim at the economy all this week on CNN and you know what? We're getting a ton of questions from viewers who really want to know what you think, and we want to take some time to answer them.
We've got Gerri Willis and Stephanie Elam joining us right now. So let's get right to it.
Our first question is for Gerri from a viewer calling on our AMFix hotline 877-my-amfix. Let's listen.
(BEGIN VIDEO CLIP)
QUESTION: My name is Lisa W. And I'm calling from the Bronx in New York State. And my issue that I have is that everyone's talking about homeowners. What about people who rent or people who own condos or co-ops that are having problem paying their rents and their maintenance every month?
(END VIDEO CLIP)
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, Lisa, you know, I wish I had better news for you. There isn't a lot of help for homeowners here.
As a matter of fact, about the only thing that's really directed at renters is if your landlord goes into foreclosure, you're not going to be tossed out on your keister right away if their loan is owned by Fannie Mae or Freddie Mac. So that's some good news because it has been a problem. The renters have had to leave their apartments. But in terms of help trying to meet that monthly rental amount that you have to pay, I have to tell you there's not a lot of help out there for you.
The thinking is, if you've lost your job, they've extended food stamps, you know, they've bumped up the amount you get in unemployment benefits, but that's about it.
ROMANS: Right.
ELAM: (INAUDIBLE)
(LAUGHTER)
CHETRY: And our next question is from someone wondering, did I change the channel? Am I watching "The View"? No, I'm kidding.
(LAUGHTER)
You realize when John's gone, wow, we have a lot of ladies on the show here. And we're going to hear from them in a second.
But our next question actually is for Stephanie. It's from a viewer calling into our "AMFix" hotline.
(BEGIN VIDEO CLIP)
QUESTION: When Barney Frank is in here talking about "we own it, we own it," does he mean the taxpayers own it, or does he mean that the government owns it? Since it's the taxpayers are the ones that put the money out for it, we should have stock in it.
(END VIDEO CLIP)
CHETRY: There you go.
ELAM: We're going to say...
CHETRY: He's talking about AIG.
ELAM: AIG, right? And we're going to say basically as the government owns it, and you got to think of them as sort of your proxy. Not every individual in America is going to get a sheet saying I am now a shareholder in AIG. It doesn't work that way, so you got to think of the government as pretty much taking care of business for you and being the --
ROMANS: Or not taking care of it.
ELAM: Or not taking care of it. Right.
But they're the executor of that, but we're not each going to get a share in AIG or anything like that.
WILLIS: Well, but that would be the least we could ask for, right, given what's going on?
CHETRY: Exactly, exactly.
ELAM: Yes.
CHETRY: All right. We are following breaking news as well this morning. We have brand new audiotape. It's purportedly from Osama bin Laden. There are some new clues in it, so we're analyzing this and we're going to tell you more about it coming up next.
Twenty-five minutes past the hour.
(COMMERCIAL BREAK)
CHETRY: Twenty-eight minutes past the hour. We're tracking some breaking news for you this morning.
Signs of life from Osama bin Laden. There's a new 11 1/2-minute audiotape reported to be from the al Qaeda leader, again, taking on the United States. Defense chief Robert Gates reminding people how hard it is to track bin Laden down.
(BEGIN VIDEO CLIP)
ROBERT GATES, DEFENSE SECRETARY: Too many people go to too many movies. Finding these guys is really hard and especially if they have some kind of a support network.
(END VIDEO CLIP)
CHETRY: All right. So again, that was the defense secretary before news of this tape came out, but again just highlighting the difficulties in trying to get our hands on the terror mastermind. The voice on this tape also talks about what America's so-called confrontation with Islam across the Middle East, including Iraq, Afghanistan and Pakistan.
Also coming from the Pentagon, Defense Secretary Gates indicating that the military will cut back and possibly soon end forced tour extensions. They're known as the stop loss method. Gates said that the practice was "not the right thing to do." Stop losses could end by March of 2011.
And another uptick in gas prices. AAA reporting the national average price for unleaded regular is now $1.93 a gallon. It's a penny higher than yesterday's price. Thirty-nine states though still have gas prices below $2 a gallon -- Christine.
ROMANS: All right, Kiran, we're on the "ROAD TO RESCUE" this morning, and the Federal Reserve is taking a bold step to try to stimulate the housing market and the economy, frankly.
The central bank injecting $1 trillion into the economy, buying up treasury bonds and mortgage securities to help unclog the credit markets pushing mortgage rates lower. That's good news for your money especially if you're looking to buy a house or maybe refinance.
Joining us to talk about that and the AIG bonus backlash, investment adviser Ryan Mack. He is the president of Optimum Capital Management, and we welcome Keith McCullough, CEO and chief investment officer of Research Edge.
Gentlemen, let me start with you, Ryan. This controversy over the AIG bonuses, I mean, the American people are outraged about this. We find out that Senator Chris Dodd says he's responsible for some of the language in the stimulus bill that sort of allowed these bonuses to go through at the behest really of the Treasury Department, he says. I mean, have the American people kind of washed their hands of administration and Washington efforts now to try to fix the economy because of this distraction?
RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Well, I do think that it really impacts consumer confidence. And looking at the administration, you know, Chris Dodd, I'm glad he came out and finally said something, that he, in fact, apologized for that because this administration basically promised us to have transparency, and making sure that we know exactly what our government is doing at all times -- what did we vote for, who changed the amendment, why didn't this law or legislation get amended.
So I think that was a great move. And, you know, the government dropped the ball and the corporations dropped the ball. They didn't have the moral ethos to make sure that they didn't give out those bonuses in the first place.
ROMANS: Keith, the president has this town hall last night, where he tried to kind of -- he took the blame for it, but then also said that he didn't create the mess in the first place. Do you think that they're losing political capital and political will? It might cost more money to fix these problems. I mean, are the American people -- are they doing the right thing?
KEITH MCCULLOUGH, CEO AND CHIEF INVESTMENT OFFICER, RESEARCH EDGE, LLC: Yes. I think now they're finally doing the right thing. You finally have Bernanke taking control of the situation. Maybe we weren't doing the right thing when we had Summers and Geithner maneuvering. I don't think people bought into that. Obama is stepping up. And I think as Ryan pointed out, everything is built on confidence, given transparency, accountability and trust which was the message, really something more than just, you know, rhetoric with Bernanke backing it up with a trillion-dollar program yesterday. That's a lot of money.
ROMANS: Do you think President Obama did a good job doing this town hall? I mean, overall, you're happy with that?
MCCULLOUGH: Yes, absolutely.
ROMANS: OK. Let's talk about that trillion dollars into the economy, Ryan, immediately, Zillow.com, said that you saw mortgage rates go down.
MACK: Yes.
ROMANS: I mean, for anybody watching right now, the bonus distraction is a big, big story on principle. People are outraged. What happened yesterday with the Fed affects their money today.
MACK: Exactly. Exactly. At the end of the day, 4.96 percent. Rates have dropped down to a total of 30-year fixed rate. This is going to affect your bottom line. The whole crux of this market now is housing prices. Can people afford to purchase homes? And this actually makes homes cheaper for individuals. It shores up balance sheets. It shores up the balance sheets of Fannie and Freddie May. There are risks -- you know, higher inflation, the moral hazards that it might suggests. And in terms of putting more taxpayer's money at risk.
But I think over the long run, this is going to shore up housing prices despite possibly having a $5 trillion balance sheet for the Fed over the next two years. I'm not necessarily sure about that. We're slightly concerned, but I think it's a good move overall.
ROMANS: The Fed essentially printing money, but, boy, there's a lot of reasons why they're doing that right now.
MCCULLOUGH: Right. And they're printing it in the two places that you care -- your home and in your 401(k). So when you do what Bernanke did yesterday, you actually break the buck, where you break down the dollar. When the dollar goes down, everything else that you own reflates. And that's what you need.
You need to -- you know, house prices have to stop going down, that's positive, that builds confidence, and your portfolio can stop going down. We've seen, you know, the stock market go up 17 percent in the last six days. You know, that's going to build confidence. Markets are built on confidence, and I think that's where we need to get.
ROMANS: If we could just buy trillion dollars in confidence and just put it right where it needs to be, wouldn't that be easy and great. Keith McCullough, thanks so much. Ryan Mack.
MACK: Thank you.
ROMANS: Back to you, Kiran.
CHETRY: All right. Still ahead, the family of Natasha Richardson, the actress, left with more questions than answers this morning. The actress died suddenly after falling on the slopes in Quebec. There are new details this morning about what happened after she fell. It's 33 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. You know, we're learning new details this morning about the tragic death of actress Natasha Richardson. The first ambulance that was sent to the ski resort where she fell was reportedly turned away. Paramedics telling a Canadian newspaper that they were told they were not needed. They never even saw Richardson. A lot of questions this morning, but Gary Tuchman lays out what we know so far.
(BEGIN VIDEOTAPE)
GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): The story could not be sadder.
Natasha Richardson, a talented actress, married to a talented actor, the mother of two children who she was skiing with on vacation in Quebec has died from an apparent head injury suffered in a fall on the slopes.
A family spokesperson announcing tonight: "Liam Neeson, his sons and the entire family are shocked and devastated by the tragic death of their beloved Natasha. They're profoundly grateful for the support, love and prayers of everyone and ask for privacy during this very difficult time."
The 45-year-old actress was flown Tuesday to Lenox Hill Hospital in New York from Montreal, after falling on a beginner's slope where she was taking lessons a day earlier. Family members, like her mother, Oscar-winning actress Vanessa Redgrave, her husband, actor Liam Neeson, and both their children, all were seen at the hospital in the hours before the announcement was made.
TV crews and reporters surrounded the hospital. The family had not been commenting, which gave many of us a bad feeling. After she fell on Monday, Ms. Richardson began complaining of a headache. She was taken by ambulance to a hospital about 20 minutes away.
The ski resort spokeswoman said that she didn't show any signs of injury. She was talking and she seemed all right. Throughout the day Tuesday, conflicting reports about Richardson's condition -- Tuesday night, she was flown from Montreal to Lenox Hill Hospital. Throughout the day Wednesday, family and friends, like actress Lauren Bacall, were seen arriving at the hospital.
And, tonight, the announcement that she had passed away. The Tony Award winner appeared in films like "Maid in Manhattan" and the 1998 remake of "The Parent Trap." In 1994, she co-starred with the man who later became her husband in the film "Nell."
(BEGIN VIDEO CLIP -- "NELL")
NATASHA RICHARDSON, ACTRESS: Mommy loves daddy, really.
(END VIDEO CLIP)
TUCHMAN: The couple was married that same year. Their two sons are 13-year-old Michael and 12-year-old Daniel, who were with their mother at this Broadway opening. This family, so often brought together under the bright lights of the stage of the cameras, are now together in New York at this most tragic of times.
Gary Tuchman, CNN, Atlanta.
(END VIDEOTAPE)
CHETRY: Such a horrible story because it just feels -- I mean, you're OK one minute, you fall, and by all accounts in just wet snow.
ROMANS: Right.
CHETRY: That she didn't hit a tree or hit a person, and then, it all -- she dies in just a couple days later.
ROMANS: And it's so sudden, and you know, just shocking for the family. Shocking is the word they used in their release. It's just -- it's really a sad story.
CHETRY: Yes. And we're actually going to be talking more about this, getting some insight from Dr. Stephen Mayer. He's the director of the Neurocritical Care Unit at Columbia University Medical Center. He's just going to talk more.
I mean, you know, for people to know -- if you do fall and you feel that you're OK, should you still try to get some sort of CAT scan or MRI?
(CROSSTALK)
ROMANS: To be walking and talking and then have it be so serious and not know. It's just tragedy. CHETRY: That's coming up in our next hour.
ROMANS: And the other big story we're following this morning, concerns about the economy and your money. And, you know, we know you have questions. We're answering them next, including what you should actually invest in these days if you've got money to invest. Gerri Willis and Stephanie Elam will be here with some advice on that. And reminder, you can ask us questions. You can sound off on anything that's on your mind. Call our new show -- the new show hotline. It's 877-my-amfix, that's 877-692 -- this is how I need it -- 692-6349.
(BEGIN VIDEO CLIP)
QUESTION: This is Kenny from Atlanta, Georgia. One hundred years ago, the government broke up standard oil for being a monopoly. No company should be as big that it threatens the national security if it fails, as does AIG. AIG should be broken up and maybe Exxon Mobil as well.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
ROMANS: Welcome back to a special "ROAD TO RESCUE" edition of AMERICAN MORNING. We're taking dead aim at the economy all this week on CNN and, you know, we're getting lots of questions and calls from our viewers, we really want to take some time to answer them to help you out. Gerri Willis, Stephanie Elam join us now. Let's get right to it.
Our first question is for Stephanie. It's from one of our viewers calling into our hotline. Let's listen.
(BEGIN VIDEO CLIP)
QUESTION: This is Sally from Orlando, Florida, and the question that I have is, if you do have some money, for example, my son got some money for his birthday, where should I invest that?
(END VIDEO CLIP)
ROMANS: That's a good problem to have -- a little money (INAUDIBLE).
(CROSSTALK)
ROMANS: I want to hear a lot more people like Sally. We'll know that things are getting better in the economy and the market, right?
(CROSSTALK)
ELAM: Right. Having some money to invest. Well, you know, here's the thing. If you're going to invest, you can do it in something safe. I'm assuming he's a young child. You can invest it in U.S. savings bonds, something that's going to give you nice slow returns back. You can also start up a 529, which will help save money for college. And other people point out that stocks are really cheap right now. If you have a riskier platform...
(CROSSTALK)
ELAM: ... you can put them in and by the time they grow up, you know, there will be some big gains for them. Stocks are really cheap right now, but it all depends on what your risk level is, but there's options.
ROMANS: But the 529 is an investment vehicle basically to invest money for college and stocks are cheap right now. If you have a long time (INAUDIBLE) and people start to get excited about those.
(CROSSTALK)
WILLIS: A great Web site for that -- savingforcollege.com. If you're thinking about a 529 plan, tells you how to do it, where to put the money, how to set it up. It's easy.
ELAM: And you can even give as little as $25 a month to do it. So, it's a really safe way to do it and it doesn't require a lot of constant investment.
WILLIS: Mom and Dad, the index plan, not a bad idea.
ELAM: Yes.
CHETRY: Good stuff, both of you, thanks. Well, also, Gerri, we've been getting a lot of e-mails. People are concerned about AIG, not just the outrage over the bonuses, but how it actually affects their retirement.
WILLIS: Right. Exactly. You know, we talk a lot about AIG as an investment in the stocks. Forget about it. What if you have an annuity that's an AIG annuity? And let me tell you, there are literally hundreds, if not thousands, of people who have this. They're relying on it for retirement.
An annuity is just an investment contract that pays you on a regular basis. And here's what I have to say for you today. If you're worried about it, if you're concerned, check out the contract, see where that insurer is based. AIG actually owns 72 different insurance companies. So you want to make sure that you know where that's based. That's how you'll know what laws apply to you and how much the state government is going to stand behind you if there's a real problem at AIG.
So the levels differ, and here in New York, it's $500,000, if you lose $500,000. In Texas, it's $100,000. The devil is in the details here, but at the end of the day, if you have no surrender charges, no charges for getting out of this investment, you can move your money. It's all about peace of mind here. And if that's your only income, I know folks are really worried about it, it's worth thinking about.
ROMANS: The government has said it's going to protect this company. It's going to protect the people who have their insurance products with this company and their investments with this company. They have been very clear they're not going to let the company go down.
WILLIS: And most of the financial advisers I talk to, they say, hey, look, don't worry about it, this isn't something you have to be concerned about. But I'm still getting lots and lots of e-mails from people saying what do I do?
(CROSSTALK)
ROMANS: It's nerve-wracking. All right. Thanks, Gerri. You know, we'd love to hear more from you. Call our hotline at 1-877-MY- AMFIX. That's 1-877-692-6349. And also check out our new blog, AMFix, when you get to work. just go to cnn.com/amfix. It's 45 minutes after the hour.
CHETRY: Young, smart and struck with a great idea. Even in this economy, a small business is born.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: How did that happen?
UNIDENTIFIED MALE: We started making deliveries out of the back of my car with a few good friends of mine.
(END VIDEO CLIP)
CHETRY: College biz whiz. If he can do it, could you?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I think it's a great time for an entrepreneur to start a business.
(END VIDEO CLIP)
CHETRY: Ahead on the Most News in the Morning.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Although no one has seen Ruth Madoff since her husband, Bernard, went to jail, we have exclusive cell phone footage of Ruth Madoff relaxing in their $7 million penthouse apartment. Take a look at this. Here. There she is. You can see her enjoying herself.
(END VIDEO CLIP)
CHETRY: Instead of snow angels, dollar bill angels. Sometimes you got to laugh or you're going to cry. Welcome back to our special "ROAD TO RESCUE" coverage here on AMERICAN MORNING. Jay Leno with his take on what Ruth Madoff might be doing. But we have more on that story coming up in the next hour.
First though, CNN's Jim Acosta is introducing us to a young business wizard who's blazing his own trail with a company based on the concept of giving. He's in Washington this morning with that story.
Hey, Jim.
JIM ACOSTA, CNN CORRESPONDENT: Good morning, Kiran. I'm going to go out on a limb this morning and say that not all CEOs are bad. Thirsty for some good news on the economy? Meet CEO Ben Lewis. He hasn't given himself a million-dollar bonus. He doesn't fly in a corporate jet. And he doesn't need a bailout. What he does have is a good idea.
(BEGIN VIDEOTAPE)
ACOSTA (voice-over): He looks like an intern, pitching the latest product from corporate America.
BEN LEWIS, ENTREPRENEUR: I'm Ben. Nice to meet you.
ACOSTA: But Ben Lewis is selling his own brand of bottled water. It doesn't come in different flavors. It comes in different causes.
LEWIS: Our whole selling point is, it's not about the water, it's about a movement.
ACOSTA: A dime from each bottle of Give goes to charity. Oranges helps the fight against muscular disorders. Pink is for breast cancer research. Green goes to the environment, blue, children with AIDS. Did we mention Ben is still a sophomore in college?
(on camera): And Ben, how did that happen?
LEWIS: We started making deliveries out of the back of my car with a few good friends of mine and it really just expanded.
ACOSTA (voice-over): Now he's got a bottling plant supplying ten retail chains, including whole foods. And he's raised $75,000 for his charities, which you could say are drinking it up.
DANA RICHARDSON HERON, SUSAN G. KOMEN FOUNDATION: If you have a choice to buy water that's going to benefit a corporation versus water that's going to benefit an organization such as Susan G. Komen for the Cure, I think you'll choose Ben's water.
ACOSTA: After all the carnage on Wall Street, investors are craving new ideas from new faces. It was only a decade ago when Google was founded by two college students working out of a garage. Is Ben on to something? His roommate, Greg, thinks so.
GREG VAN, BEN LEWIS'S ROOMMATE: We need more Google ads. We need more, you know, more Facebook guys. We need more Bens. And hopefully, America will still be at the top of its game.
ACOSTA: But Ben's got a ways to go. He only has four employees, and has yet to turn a profit.
(on camera): There's a little extra in there for pizza money and that sort of thing?
LEWIS: Hopefully, at the end the day, yes.
ACOSTA: Ben Lewis remembers how he started out selling lemonade. So he knows what to do when the economy hands you lemons.
LEWIS: I think it's a great time for an entrepreneur to start a business. I think if you have a good idea and the passion, and a unique concept, and really the energy behind it, it's -- you know, the economy...
ACOSTA: You can make it happen.
LEWIS: ...you can make it happen.
(END VIDEOTAPE)
ACOSTA: Now, I know what you're thinking. Ben Lewis has picked a controversial vehicle for his cause. Environmentalists worry about the plastic bottles that are piling up fast in the nation's landfills. Well, Ben says he's got that all figured out, with plans to roll out a biodegradable bottle that decomposes in a decade instead of a century.
Not bad, Kiran.
CHETRY: Not bad. You know, it's very true. I went to college, University of Maryland, and at the time, it's just a bunch of lacrosse players and they had an idea. Now it's under armor so you can imagine.
ACOSTA: Wow, that's true. Very good point.
CHETRY: Right?
ACOSTA: Those Marylanders did well. And I have to say when I was in college, I was not thinking about bottles of water, it's a different kind of bottled liquid. But anyway...
CHETRY: Exactly. If we only knew now, you know, or then what we know now. All right, Jim?
ACOSTA: It explains a lot, yes.
CHETRY: All right. Thanks so much. Fifty-two minutes after the hour.
Bonus madness.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We have such abuse here, arrogance, incompetence and greed.
(END VIDEO CLIP)
CHETRY: Everybody is angry at AIG. But what's all the fury going to mean to you?
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Stop this insanity!
(END VIDEO CLIP)
CHETRY: Beyond the outrage, to what's next.
Plus, we're online and taking your calls. Six ways to get your AMFix and get real answers. The "ROAD TO RESCUE" starts right here. You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
CHETRY: Well, the outrage isn't really going anywhere over these AIG bonuses. But there still seems to be some confusion over who knew what and when. And time for the truth-o-meter to help us separate political fact from fiction.
Bill Adair is the co-founder of Politifact.com. He joins us now this morning with more.
Boy, the AIG -- I mean, we're talking about $165 million that stoked all of this outrage. Meanwhile, we've poured trillions into all these various bailouts. But, you know what, it really has struck a nerve so let's talk about it. Glad you're with us, by the way.
BILL ADAIR, FOUNDER, POLITIFACT.COM: Thank you.
CHETRY: All right. So we have Senator Ron Wyden, a Democrat from Oregon, who said that this whole AIG bonus debacle could have been prevented with an amendment that he and fellow senator Olympia Snowe, a Republican from Maine, added to the stimulus bill back in February. This is what he said. "We had bipartisan legislation that got through the Senate that would have prevented bonuses like AIG's, and then somehow it mysteriously disappeared."
What's the verdict on that?
ADAIR: We gave that a mostly true on our truth-o-meter. And indeed Senator Wyden and Senator Snow did have an amendment to the stimulus bill that would have put some limitations on bonuses to companies that have received bailout money. What it specifically did was any bonuses above $100,000 were prohibited if the company still paid them, they would face an excise tax of 35 percent. So that's why we gave it a mostly true. It would not have prohibited all of the bonuses, but it would have put a big tax penalty on the biggest ones so mostly true for that one.
CHETRY: All right. And what did you make of the fact that yesterday Senate Banking Committee Chair Christopher Dodd came out and said "I was responsible for that language" added to the federal stimulus bill.
ADAIR: Yes, that was really interesting. And that spoke to the other part of Wyden's statement that there was a mystery about how it was taken out. And so now that mystery has been resolved. I think the question now, and we may be fact-checking this in the next few days, is what role did the White House play in that, and what specifically did the White House tell the conferees in Congress who then removed that provision. So it's going to be interesting to follow.
CHETRY: Right. It's a lot of finger pointing. You guys have to chase that down because Senator Dodd said, the White House said to do it.
ADAIR: Right.
CHETRY: So we'll see what happens there.
Well, we also have Congressman Elijah Cummings. He's a Democrat from Maryland. He said he's been railing against these retention bonuses like the ones given to the AIG execs. In a TV interview earlier this week, this is what he said, "AIG's recent filings, they said they were giving $57 million to people who are being terminated. I mean that goes in the opposite direction of retention." So what is the truth-o-meter say about his claim?
ADAIR: This one's really amazing in one sense, it gets a true on the truth-o-meter. And Congressman Cummings is right. When you look at the filings that AIG made with the S.E.C., indeed, that's what they say, that there is $57 million for employees who are being terminated.
And this I guess gets to the real purpose of these payments. And, you know, we've called them bonuses, but it might be a whole different debate if we referred to them as retention payments. The company's point is you've got to keep these people on board, even though their jobs are being eliminated, you've got to keep them on board as they kind of wrap things up, because only they know how these jobs work. But as far as what Cummings said, it gets a true.
CHETRY: Right. They know how to unwind the books, so to speak, that's what people say on Wall Street.
OK, well, there's a chain e-mail that's making the rounds claiming to know why Congress has been eager to bail out AIG, and it reads in part: "Remember when this economic crisis hit, and Congress let Bear Stearns go under, pushed a bunch of forced marriages between banks, et cetera, then they bailed out AIG. At the time I thought, that's strange. What does an insurance company have to do with this crisis? I just found out the answer. Among other things AIG insures the pension trust of the United States Congress. No wonder they got bailed out right away." Again, a chain e-mail. What's the verdict?
ADAIR: This one is so wrong it gets a pants on fire on the truth-o-meter, which is our lowest rating for things that are ridiculously false. This is not true at all. But I'm sure probably a lot of your viewers have gotten this e-mail or read it on blogs. It's been widely circulated, and the point is that Congress would have a self-interest in helping AIG, but it's just not true. Congressional pensions, like all federal pensions, just come from taxpayer money. There's no private company that insures them. We checked that out and found that, you know, it's to the extent that they're insured, it's you and me, the taxpayer, who are insuring it. So, pants on fire for that one.
CHETRY: Just add it to the pile, Bill. Add it to the pile of things that taxpayers are responsible for. Bill Adair, founder of politifact.com. Great to talk with you. Look forward to checking in with you next week. Thanks.
ADAIR: Thanks, Kiran.
CHETRY: Christine.
