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American Morning
Treasury Department Power Grab; AIG Execs Give Back Bonuses; Churches Struggling During Recession; Economic Soothsayers; Pink Slips: Ladies First?
Aired March 24, 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: Good morning. Thanks so much for being with us. It's Tuesday, March 24th. I'm Kiran Chetry.
JOHN ROBERTS, CNN ANCHOR: Good morning to you. I'm John Roberts.
Let's get right to it this morning because we've got a lot to cover.
Here are the big stories topping the agenda right now. We'll be breaking them down for you in the next 50 minutes here on the Most News in the Morning.
We begin with your money and take a breath, because, yes, this morning it's good news. Right now, markets overseas are up after a major rally on Wall Street yesterday; the Dow up nearly 500 points. The question this morning, though, is it going to hold?
Also, breaking right now. New details just coming in about the Treasury Department's request for new powers to avoid a repeat of the financial crisis. We'll tell you what it could mean for you and the company that work for.
Also, this morning a story a lot of people will be talking about, some of those huge AIG bonuses that sparked outrage last week are being returned this morning. We're all over that story. We're going to have more for you coming up here.
CHETRY: All right. We begin, though, with two major business stories on our radar, right now, world markets are picking up where Wall Street left off yesterday.
If you take a look we're seeing green arrows, all the arrows pointing up across Europe and Asia this morning. The rallies followed the Dow's fifth best day in history soaring nearly 500 points yesterday after the treasury unveiled some more details on the plan to rid struggling banks of toxic assets and also to get credit flowing again.
Happening right now, CNN's White House team learning brand new details of a plan that the Obama administration will roll out today. It would give the Treasury Department new muscle over financial businesses which are currently subject to little or no regulation. Treasury Secretary Timothy Geithner will talk more about it when he goes before lawmakers in just a few hours. And CNN's Suzanne Malveaux is live at the White House this morning.
What else are you learning about the Treasury Secretary's pitch today?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Kiran, really what this involves is the government getting much greater oversight over some financial institutions that didn't have big regulations that they were free from those regulations in the past.
And senior administration officials are telling me this morning specifically what Secretary Geithner is going to tell lawmakers. One important section he's going to say that, "All institutions and markets that could pose systemic risk will be subject to strong oversight, including appropriate constraints on risk-taking."
So what does this plan entail, Kiran? Well, there's three major components that allows the government to step in, first and foremost to sell and transfer company assets. Another big component, very important, people paying attention to this one, to renegotiate or dissolve executive compensation, those bonuses that we've been talking about. And also allowing the government to step in when it comes to these kind of risky portfolios that we've seen in the past.
All of this, Kiran, meant to give a sense of confidence, of reassurance and transparency to the American people that the government is on top of this, not just banks, but other financial institutions, Kiran.
CHETRY: All right. Suzanne Malveaux for us at the White House.
I guess we'll talk a little bit more about how it's going to be received on Wall Street.
ROBERTS: Yes. A lot of people will be wondering about that.
Christine Romans is here minding your business this morning. We saw everything from Bear Stearns to AIG. These people were just taking flyers with no risk assessment attached to it. But this is a pretty big hammer for the government to heft to try to rein those industries in.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It really is and this is the government trying to say look, we want the power and the tools right now to make sure those things don't happen again. To make sure that we have the property authority to handle a Lehman Brothers, for example, to handle a Bear Stearns a little bit better, to handle an AIG. This is hedge funds, this is insurance companies.
It's trying to prevent another AIG debacle and it's essentially brought authority to seize failing firms. And also you heard Suzanne say to renegotiate those employment contracts. If they have the powers like this, they would not have the whole AIG bonus debacle.
This is the administration saying, "Look, we get the message from all of this and we're going to make sure it doesn't happen again.
Remember, Ben Bernanke has spoken about this. The president himself has said we need more powers. There's been a lot of talk in past weeks about how to really have a modern regulatory system. Because remember, the lack of regulation is why all of this has allowed to balloon up into a big problem in the first place.
CHETRY: And so is it up to Congress then to give the Ok for this? Is that why he's going before Congress today?
ROMANS: Right. He's going to lawmakers and he's going to say, "Look, we need to you write the law to give us this. It's going to take Congressional authority. We want Congress to be a partner here making sure that we have this authority."
It will be interesting to see if some of his opponents on Capitol Hill will be so quick to give him that authority. They'll call it a power grab. Others will say, "Look, we're just doing exactly what you told us to do, preventing this from ever happening again."
CHETRY: All right, thanks so much, Christine.
Stay with us. We have another story that we'll be talking about this morning for sure, a wave of outrage. Fifteen of the largest bonuses handed out at AIG are now been returned, adds up to more than $50 million of your tax dollars.
Here's what New York's Attorney General Andrew Cuomo told reporters last night.
(BEGIN AUDIO CLIP)
ANDREW CUOMO, ATTORNEY GENERAL, NEW YORK: I would like to say that the individuals who have given the money back, you've done the, quote-unquote, "right thing." You've done what this country now needs and demands. We're living in a new era of corporate and individual responsibilities. And I believe the employees have set an example for the rest of the company.
(END AUDIO CLIP)
CHETRY: All right. So was it that new era of individual responsibility that brought that change of heart about, Christine?
ROMANS: Or public shaming. I don't know, and the fact that Congress was saying we're going to tax it at 90 percent anyway. The House was, at least, as you know, last week quickly passing a bill to tax pass some of that.
CHETRY: But the Senate seemed to be backing off from that.
ROMANS: The senate seems to be backing off and the Republican opposition in the Senate was saying, "Look we're going to throw some procedural road blocks in your way, so you just can't - I think after a week there was some feeling that things got crazy about the AIG bonuses. But 15 of the 20 people saying they're going to give up at least half of those bonuses and that is in response to a public plea from Ed Liddy, the new CEO of that company who gets $1.00 a year, by the way. Who said, "It's right thing, it's the patriotic thing for to you do, to put this behind us and not take the whole bonus." And so some people are following suit. So we'll see if they'll put it to rest.
ROBERTS: A lot of money to give up...
ROMANS: It sure is.
ROBERTS: ... but then again there's a lot of heat coming down.
Christine thanks so much.
Quick programming reminder for you this morning, President Obama goes before the cameras tonight for another live press conference - prime time press conference. You can see all of it here on CNN. Full coverage kicks off at 7:45 Eastern tonight. We're going to stream it live as well on cnn.com/live.
And if you watch the president's press conference, give us a buzz before you go to bed. Call our show hotline at 877-MY-AMFIX. Tell us what you thought. We'll include your calls in our coverage tomorrow. That's 877-692-6349.
Here on AMERICAN MORNING, it's usually our producers and directors who worry about where we're sitting or standing on the set during the show. But it turns out that Jay Leno is watching, too.
Have a look.
(BEGIN VIDEO CLIP)
JAY LENO, HOST, "THE TONIGHT SHOW": I was watching CNN the other day and they tried something new by putting two sets of news anchors in the same shot. You know what I'm talking about?
We have it - this is the actual CNN. Look at this. Here's the news. Now, doesn't it look like two guys in an airport bar getting ready to hit on two other chicks? Hey, Bob, what do you think? I'm going to go for the blonde. Jim, you take the brunette. Look at the gams on that one.
Just a weird setup - a weird setup.
(END VIDEO CLIP)
CHETRY: Little did Jay Leno know we were talking about important and weighty things.
ROMANS: That's right those AIG bonus and restructuring competition in this country.
ROBERTS: People looking over your shoulder at the same time. CHETRY: Exactly. Well, if you look behind John right now, there's Sarah - she's right behind - and Jerry or maybe they're at the airport bar fighting over who is going to hit on John.
(CROSSTALK)
CHETRY: Thanks, Jay. Love the shout out.
Are you thinking about refinancing but are the costs holding you back - closing costs, that is? Personal finance editor Gerri Willis - she's not hitting on John - she's actually trying to help you guys. She's going to be joining us now with some cost-cutting tips.
I've even been asking her for advice about this one. She's going to be joining us throughout - throw your questions at her, too, by the way. You can call at 877-MY-AMFIX. She's also up on Twitter as well, twitter.com/amfix.
ROBERTS: Congressman Barney Frank talking same-sex marriage and the Supreme Court. He has a few choice words for conservative justice Antonin Scalia. We'll play those for you.
It's seven minutes now after the hour.
(COMMERCIAL BREAK)
ROBERTS: Coming up now at ten minutes after the hour.
Welcome back to the Most News in the Morning.
Let's fast forward to the stories that we'll be watching very closely today on CNN. New ashfall warnings are in effect today for parts of southern Alaska after the Mt. Redoubt erupted for a sixth time yesterday, sending a burst of ash nearly 60,000 feet up into the sky. Residents are being told to seal windows and door and protect their water supplies.
At 2:00 p.m. Eastern the battle on border comes to Washington, a house appropriations subcommittee will hear from government agents about America's efforts to keep Mexico's bloody war against drug cartels from slipping into the United States.
And at 9:40 Eastern this morning, President Obama will make a really long distance call to congratulate the shuttle "Discovery" crew and astronauts at the International Space Station on their current mission. The president will make the call with Congressional leaders and middle school students from the Washington area.
And that's what's on the agenda this morning - Kiran
CHETRY: Thanks, John.
Well, also in just a few hours House lawmaker are going to be firing up the grill, as they say, on Capitol Hill today as Treasury Secretary Timothy Geithner takes another turn in the Congressional hot seat. He'll be facing some tough questions about the AIG bonus scandal, also the administration's new plan to buy toxic bank assets. Geithner is expected to also press lawmakers for more regulatory power to prevent a repeat of the financial crisis.
All in all, it should make for good political theater. Carol Costello has the story.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: This is so outrageous.
CAROL COSTELLO, CNN CORRESPONDENT (voice-over): It's all the rage on Capitol Hill, the vilification of AIG.
REP. PAUL W. HODES (D), NEW HAMPSHIRE: AIG now stands for arrogance, incompetence and greed.
REP. GARY ACKERMAN (D), NEW YORK: It's like snake oil salesmen selling you jars of snake oil and they don't even have the oil in the jar.
COSTELLO: Those lines are not spontaneous, but carefully crafted.
JONATHAN ALLEN, CQPOLITICS.COM: That's the way you let your constituents know you're looking out for them. There is some value to holding up officials or even private executives to public scorn sometimes. The question is how much is too much?
COSTELLO: Some political observers say Congress has already crossed the line. Jonathan Allen compares the AIG hearings to the McCarthy hearings of the 1950s. Back then, Senator Joe McCarthy used his power to brand more than 200 government workers as card-carrying communists.
Today, Allen says Congress is branding all AIG employees robber barons even though no one broke the law.
ELIOT SPITZER, FORMER NEW YORK GOVERNOR: The outrage is legitimate. But it is being fomented by a sort of a faux populism by many on Capitol Hill who saw this coming; who knew this was going on.
I look at them and I say, "Come on, guys. You're supposed to be more mature." Express the anger but then say how do we solve it? Don't just throw more oil on the fire.
COSTELLO: And the fire is intense, so hot that some AIG employees live in fear.
EDWARD LIDDY, CEO & CHAIRMAN, AIG: I'm just really concerned about the safety of our people, so let me just read two things to you, "All the executives and their families should be executed with piano wire around their necks."
COSTELLO: On Tuesday, it will be Treasury Secretary Timothy Geithner's turn in the hot seat again. He'll testify for an eighth time, even though he's been on the job less than two months. On the agenda? When Geithner knew about those AIG bonuses; and while lawmakers say his testimony will provide important information, there are many who wonder.
LARRY SABATO, UNIVERSITY OF VIRGINIA: Think back over the hearings that we've had since the start of the Obama administration. Has anything major been revealed that wasn't already in the newspapers or wasn't already known by Congressmen and the administration behind the scenes?
COSTELLO: Carol Costello, CNN, Washington.
(END VIDEOTAPE)
CHETRY: That brings up a good point, how much of it is political theater and how much of it is fact-finding.
ROBERTS: There's so much of this that they know that they really can't do anything about it. Because, you pass a bill in the House and in the Senate says, we better rethink that. And the White House says, we don't want to govern out of anger. And everybody's just throwing a lot of stones but I really don't think there's much they can do about it now that 15 of these 20 people have given back the bonuses.
Is there really much of a story left at all?
CHETRY: No.
Well, we'll see what happens. It's also the same day that's he's going to talk about wanting more regulation and more regulatory power asking Congress to do something, help us write something so that we don't have this happen again.
ROBERTS: Everyone is on the record they're getting their digs in, and in Washington, very often, that's what it counts.
Candid comments this morning from Massachusetts Congressman Barney Frank - not about the economy or AIG - but same-sex marriage. In an interview with a gay news Web site Frank was discussing the legality of the Defense of Marriage Act. That law defines marriage as between a man and a woman.
During the interview Frank spoke of the dangers as he sees it of having the law head to the Supreme Court. His fear, what he says of the personal beliefs of conservative Justice Antonin Scalia.
(BEGIN VIDEO CLIP)
REP. BARNEY FRANK (D), MASSACHUSETTS: I do think this argument is unconstitutional for the federal government to pick and choose as to which marriages it will accept is a good one. At some point that's going to have to go to the United States Supreme Court. I wouldn't want it to go to the United States Supreme Court now because that homophobe Antonin Scalia has got too many votes on this current court.
(END VIDEO CLIP)
ROBERTS: So far, Justice Scalia is not commenting on Congressman Frank's remarks. We do have calls out to the Justice and we'll let you know just as soon as we hear back from him.
CHETRY: This morning, a southern California woman who recently gave birth to eight babies is back in the headlines. We're going to tell you why she got rid of her free nursing service just as more of her babies were coming home.
Also, you're used to David Letterman making jokes about this but last night he made some big news himself. We're going to tell you what it was, just ahead.
It's 15 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning.
Wedding bells ringing for a late night legend on last night's episode of "The Late Show." Host David Letterman announced that he finally is taking the plunge. Take a listen.
(BEGIN VIDEO CLIP)
DAVID LETTERMAN, HOST, "THE LATE SHOW WITH DAVID LETTERMAN: On Thursday, at 3:00 p.m., March 19th, 2009, at the Teatime County Courthouse in Choteau, Montana, I was married to Regina Lasko.
UNIDENTIFIED MALE: He did it.
LETTERMAN: Regina and I began dating February of 1986.
UNIDENTIFIED MALE: That's what I mean, that's what I mean.
LETTERMAN: And I said well things are going pretty good. Let's just see what happens in about ten years.
UNIDENTIFIED MALE: Yes.
LETTERMAN: And people say, geez, Dave, you were together so long. Does it feel any different, and I say, yes. It does.
(END VIDEO CLIP)
CHETRY: Well, Letterman said that he'd avoided marriage for 23 years and Mother Nature seemed to feel the same way. He said that on the way to the ceremony his truck got stuck in the mud. They have a son together and I guess after 23 years, they're compatible.
ROMANS: That's a long-term committed relationship.
CHETRY: How about it? He wants to take things slow.
ROBERTS: A lot of people this morning were saying they had such a good thing going for 23 years, why ruin it by getting married. The institution of marriage is a good one if done correctly.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: That's why you have to have a license.
ROBERTS: I think I'll stop now.
This morning we're turning to our CNN money team to answer your financial questions. We've been getting hundreds of them since we launched our new show hotline at 877-MY-AMFIX. You can call right now and ask yours.
Meantime, here's a call for our personal finance editor, Gerri Willis this morning about refinancing.
(BEGIN VIDEO CLIP)
NANCY, NEW YORK: I'm trying to re-fi. The rates are great but the closing costs are astronomical. Please let me know how I can lower the closing costs because it's defeating the whole purpose of refinancing.
(END AUDIO CLIP)
ROBERTS: You know I heard a lot people talk about that. They want to take advantage of these low interest rates but then they look at the costs of refinancing and in some cases it's $7,000, $8,000, $10,000. Is it possible to negotiate those costs down? WILLIS: Absolutely. You can negotiate those costs down.
And let's start by talking about junk fees. These are the fees that your lender might charge you that you have absolutely no business paying, document fees, processing fees, copying fees. Now you learn all about these in something called the goodwill estimate which is an estimate of the costs of your loan. You'll get that before you sign your loan. And you are well within your rights to say hey, I am not paying that.
One way to drive down your costs of that new re-fi is staying with your original lender. They can do what they call a streamlined re-fi and that should cost you less.
Also, if this doesn't work, if you're having trouble getting what you want out of your original lender, shop around. There are lots of bankers out there, particularly community bankers who really want to give you a good deal and they're in a good position to do so.
ROBERTS: The thing I love is the so-called intangible tax that a lot of states put on. They don't know what it's for. It's intangible but they're going to charge you for it.
WILLIS: Yes. And the fees for the blondes and the fees for brunettes, they're rolling it out.
ROBERTS: Gerri, it's time to let that go.
CHETRY: Thanks, Gerri. We've also received a ton of calls about managing your IRA funds. Let's listen to one of those calls.
(BEGIN AUDIO CLIP)
UNIDENTIFIED MALE: I was just wondering if it was better to take out money out of an IRA that has to be out in five years, I believe, and put it in towards your house and refinance. Or if it was good to let it come out and put it back in to another sort of IRA.
(END AUDIO CLIP)
CHETRY: What do you think?
WILLIS: Well, I have to tell you, I think you can do both at the same time, actually. You can get that re-fi, roll the costs of your new loan into your loan and by doing that really reduce your costs.
Let's talk about the IRA for just a second here. If you're five years from retirement, you should have already changed your mix so that it's not in risky investments. So you've got it mostly in bonds and I've got to tell you if you haven't done that already you might want to start thinking about it now. I hate to advise people to lock in their losses but if you're five years from retirement you don't necessarily want all of your money in stocks.
The IRA is just the vehicle for investing. It's not the investment itself. You can put anything you want to in there: stocks, bonds, cash equivalents, doesn't matter.
ROBERTS: Great tips this morning, Gerri.
WILLIS: Thank you.
ROBERTS: Can we bring you back to do it again later on?
WILLIS: Absolutely.
ROBERTS: All right. See you then. Thanks.
CHETRY: Also new this morning, the California woman who made headlines for giving birth to octuplets has now fired a non-profit group of nurses that were helping her care for her children. An attorney for Nadya Suleman says the single mom believed the organization was spying on her and reporting her to child welfare officials.
Over the weekend Suleman was allowed to take two more of her babies home. Four of the octuplets are still in the neo-natal unit. All of the newborns are said to be doing well.
Burger lovers beware, people who eat red meat every day over a ten-year period have a higher risk of dying than their peers who eat less red or processed meat. That's according to a new study about it. With about half million people, researchers found a higher mortality rate was mostly the result of cardiovascular disease or cancer. The study also found people who ate the most white meat had a slightly lower risk of mortality.
The Obama administration rolls out a new bank rescue plan and Wall Street likes what it sees. What will it mean for Main Street? Two of the sharpest minds are going to be breaking it down for us.
It's 24 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning and a tough break for Lance Armstrong's comeback. The seven-time Tour de France crashed during a race in Spain yesterday. He broke his collarbone. Now his chances to try for yellow jersey number eight are of course in question.
(BEGIN VIDEO CLIP)
LANCE ARMSTRONG, TOUR DE FRANCE CHAMPION: Well, I always, I mean right now I'm miserable right now so now is not the time to ask but you know, I need to just relax for a couple of days and fix the problem and then make a plan.
(END VIDEO CLIP)
CHETRY: Armstrong is now headed to the U.S. where he may undergo surgery. A spokesman for the team says that the cancer survivor could be back on the bike in about four weeks.
Twenty-seven minutes after the hour.
Some of the top stories we're working on right now. A federal judge now ordering the government to allow 17-year-olds to get the morning after pill without prescription. Currently the emergency contraceptive is only available without prescriptions to women 18 and older. A New York judge accused the Food and Drug Administration of putting politics before science when it drafted the rules. The government has said politics played no role in decisions regarding the drug.
Investigators are looking into whether icing on the wings may have caused the deadly crash in Butte, Montana. Safety officials say that the plane flew through a frigid, humid air mass before nose- diving into a cemetery Sunday. All 14 on board were killed, including seven children. The single-engine plane was designed to carry only ten. But NTSB investigators say it's less likely overloading was to blame because half of those on board were small children.
And a political about face by New York Senator Chuck Schumer who now says he supports same-sex marriage. Schumer previously supported civil unions. He said in a statement equality has always been a hallmark of America and no group should be deprived of it. The New York Democrat says his state is ready to take the lead on the issue - John.
ROBERTS: Well, one day certainly doesn't make a recovery but the White House has to be feeling good about Wall Street's response to its bank rescue plan which involves buying up those so-called toxic assets to get credit flowing again. The Dow gained almost 500 points yesterday, the biggest one-day rise since November.
Suddenly Treasury Secretary Tim Geithner looks more like a hero than the goat that he was last week.
And here to look at what it all means for your money, Leigh Gallagher, she's the senior editor of "Fortune" magazine, and investment advisor Ryan Mack, president of Optimum Capital Management.
So he was an idiot last week, he's a genius this week, some confidence in the markets. Is this an indication that maybe, just maybe the economy may begin to stabilize sometime soon?
LEIGH GALLAGHER, SENIOR EDITOR, FORTUNE MAGAZINE: You know, that's a big question. There's a lot of people that think we're still in what's called a bear market rally, that we have more downside to see.
Certainly the certainty of the plan yesterday was hugely received on Wall Street, and in part because it's a great deal for Wall Street. This is a deal that favors investors. It gives them great terms. It makes the government take most of the risk. There's a reason for Wall Street to cheer this but I think a lot of this, we heard a lot about this plan, finally it came out, we got the details and that sent a big strong message.
ROBERTS: So what were you seeing out there in the market?
RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Well, I saw some very positive things.
The S&P traded three percent above the 50-day moving average yesterday. We had good news last week that new housing starts, 22 percent, five percent increase in home sales. This is some sign that there are some stabilization.
At the end of the day this plan really focuses on houses, making sure we can remove these assets from the banks so they can start lending again and getting focus back on lending so people can purchase homes more readily. People can start getting auto loans more readily, sending their kids to school, getting loans more readily. So all of these things get the market back in gear, I'm thinking it's a very positive plan.
ROBERTS: All right. So at the same time that Geithner giveth, he taketh away as well. Because this morning he's going to be up on the hill talking about seeking legislation for more resolution authority over some of these troubled institutions like AIG, so that the government would actually have the power to go in there if it looked like one of the institutions was in trouble and start mucking around with the works and unwinding certain parts of the business and propping up others.
Good idea, bad ideas, how's Wall Street going to take it? GALLAGHER: Well, this is not a surprise. I mean, he's wanted to do this, even, you know, for a long time now. And this crisis has taught us that more regulation is on the way no matter what. So it happens to be coming after a day that Wall Street really applauded. But, you know, he really wants to, as you said, get in there, and so he can do things without the bankruptcy courts and have control over banks that are not just depository institutions that would come under the FDIC.
MACK: And this is the last shoe to drop. You know, we've watched - the credit falls, swap market roll from $500 million to over $50 to $60 trillion in value, and without any regulation. We need to see that we can have some more oversight in regulation and return it back to a day so we can monitoring the system in a more efficient way.
ROBERTS: But how do you think these investment firms, and firms like AIG will look upon this? Will they say, yes, yes, we do need to be regulated. We're bad kids out there. We need somebody to spank us once in a while?
MACK: Well, quite frankly, I could care less. I mean, we have to make sure that if they're upset about it, you know what, then take this salt and eat it and make sure they understand it. You know, we're going to have to -- they're going to have to have a watchdog out here to make sure none of these mistakes happen again.
ROBERTS: And if you're not going to behave in the playground, mom is going to be looking out over you.
GALLAGHER: Yes. They're not going to like this. And there's also an executive compensation cap part of this whole plan, too. And of course, they're not going to like that.
ROBERTS: So - but one of the things we do see is after the White House and most of Congress vilifying Wall Street, the White House now seems to be saying backing off on that, saying we need Wall Street. They've got to be a part of this. And they realized, are we going too far here? We need these guys.
GALLAGHER: I think that's absolutely what happened. They're really walking with very fine line, because they have to respond to the populist rage that's out there. But they also need Wall Street to make things better. They need the private sector to really buy into this plan in a major way. So they really have to walk a fine line and they're trying to do just that, the entire administration.
ROBERTS: So based upon that, Ryan, what do you expect President Obama to say tonight at his press conference in terms of, you know, private partnerships because they'll obviously be talking about. That's the core of this Toxic Asset Relief Program. And then basically just where we go now in the recovery because the administration's been making some noise about, hey, you know, some good things on the horizon, maybe the economy may start to turn around soon?
MACK: Well, I think that he's going back to a more universal tone. A tone of positive tone, making sure that at the end of the day Wall Street is important, Main Street is important, everybody's important. And this is a problem that was caused by the government, corporations, and individuals, so it's going to be solved by the government, corporations and individuals working together in unison, trying to get us out of this mess.
So I think he's going to make a positive tone. He's going to maybe get a little bit into the details of what the plan is going to do, and how it's going to assist individuals so they can start purchasing property and start getting banks lending again. So getting back so when we can start smiling again. You know, he's been smiling a lot. And I think that really shows that he can be content, and understanding that with hard work, we will get through this.
ROBERTS: Smiling a lot, laughing on some occasions as well.
MACK: Exactly.
ROBERTS: Steve Kroft from "60 Minutes," "what are you punch- drunk?"
MACK: Right.
ROBERTS: He said no. He's just gallows here. But do you agree, Leigh, that, you know, because in his first press conference, he had a decidedly negative tone. Do you think he's going to swamp that around for a positive tone?
GALLAGHER: I think he's definitely going to pull that back in a little bit. I think he's going to talk about how we can get out of this. I think he's going to send a message of positivity, talk probably a lot about the rally yesterday. We'll see what happens today. But, you know, he really have to talk about the market being job one and the economy being job one. Health care, education, that stuff, I mean, that should take a second seat tonight so hopefully it will.
ROBERTS: All right. Full coverage here on CNN, by the way. Thanks very much for coming in this morning. Leigh Gallagher, Ryan Mack, good to see you as always.
GALLAGHER: Thanks.
MACK: Thank you.
ROBERTS: Kiran.
CHETRY: Faith and finances. He bailed out the banks, the automakers, Wall Street, but what about our churches. We're going to tell you why they're facing hard times as well.
Also stick around. In just about 25 minutes, White House Press Secretary Robert Gibbs joins us live. It's 34 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning.
You know, we've talked about how many institutions and organizations, businesses, even homeowners have been hit by these tough economic times. Well, churches, of course, can't be counted out either. Our Jim Acosta right now is looking into a very upsetting story, if you will.
I mean, it's this congregation that just had such high hopes of being able to expand and rebuild, is now finding themselves on really, really tough financial footing.
Hey, Jim.
JIM ACOSTA, CNN GENERAL ASSIGNMENT CORRESPONDENT: Hey, Kiran, good morning.
That's right. Who knew? We've heard about bailouts for banks and car companies and homeowners, but what about churches? Nobody is talking about such an idea, but churches are also being hit hard by the recession. Houses of worship are having trouble completing projects, and some are even going under.
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ACOSTA (voice-over): Metropolitan Baptist is more than a mega church, it's a Washington institution, founded by freed slaves in the 19th century. The church once played host to President Clinton. With all its success, Metropolitan secured financing for a new bigger church in the suburbs three years ago.
UNIDENTIFIED MALE: We're ready to go on that as soon as we can get the available financing.
ACOSTA: Today, the $30 million, 3,000-seat sanctuary sits unfinished. The church has run out of money to complete construction.
It must be frustrating to not be able to move into your new home. I'm just thinking like a homeowner. You know, a homeowner would feel that way.
PASTOR H. BEECHER HICKS, METROPOLITAN BAPTIST CHURCH: Absolutely. And if I had my way, I probably would have written this scenario a little bit differently.
ACOSTA: Pastor H. Beecher Hicks says skyrocketing construction costs during the housing boom sent the project over budget. Then the recession hit, and collections plummeted forcing Pastor Hicks to seek out new lenders.
HICKS: The church is also a business institutions that is affected by the financial realities that surround it.
ACOSTA: Bishop Joel Marcus Johnson knows that all too well, when collections dwindled at St. Andrews Anglican Church on Maryland's eastern shore, Bishop Johnson could no longer pay the mortgage. His picturesque church was foreclosed on last year by the local bank. The bishop, like many troubled homeowners across the country is packing up.
BISHOP JOEL MARCUS JOHNSON, ST. ANDREWS ANGLICAN CHURCH: When St. Andrews purchased this historic campus back in the middle of 2005, of course everything was going swimmingly for the whole country. The word economic portrait, economic failure simply do not yet exist.
ACOSTA: A recent study of church finances found 28 percent of congregations across the country falling short at collection time.
DAVE TRAVIS, MEGACHURCH RESEARCHER: What we've had over the last decade is lots of expansion, lots of church building, and yes, it's true, some churches have overextended themselves.
ACOSTA: Metropolitan Baptist is in a tough spot. It's already moved out of its old church and is holding worship services at this D.C. school.
HICKS: We believe that victory is only a moment away.
ACOSTA: Where the faithful pray for divine intervention.
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ACOSTA: One financial institution that specializes in church lending puts it this way. Before 2007, it had never foreclosed on a church. Now, it's foreclosed on seven, with more likely this year.
And Kiran, the folks over at Metropolitan Baptist there are not in that position and they hope to finish that project out in Largo, Maryland, not facing foreclosure but lots of other churches are.
We've talked to some other lending institutions and they said they don't want to do this but sometimes they have to.
CHETRY: Wow, what a tough story. All right. Thanks so much, Jim.
ACOSTA: You bet.
ROBERTS: We are keeping an eye on an extreme weather system that's blanketing states across the U.S. from severe flooding in the Midwest to heavy winds and blizzards. Rob Marciano tracking it all. Take a look at that. Ooh, ugly stuff today. You'll want to know how it's going to affect your day and your travel plans.
It's coming up now on 41 minutes after the hour.
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ROBERTS: Katy Perry there this morning. I saw her in concert a week ago.
Welcome back to the Most News in the Morning. A live look at New York City. It's 28 degrees here in Manhattan. Beautiful, bright day. The wind chill, though, makes you feel more like it's 19 going up to a high of 48, and it will be sunny all day as well. Severe storms, though, slamming many states in the Midwest today. More rain expected in Fargo, North Dakota. Officials there tried to fill 2 million sandbags by the end of the week. The Red River is rising and it's expected to hit levels not seen since 1997. The potential flooding threatening hundreds of homes in low-lying areas around Fargo.
And from rain to snow. Blizzard conditions affecting nearly the entire state of Wyoming. Parts of it all -- parts of all the major interstates, rather, were closed yesterday, as well as a lot of schools.
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ROBERTS: It's 46 minutes now after the hour.
CHETRY: Psychics and your career. Would you pay to have someone tell you, I see a job in your future?
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UNIDENTIFIED FEMALE: I am seeing three different places where you can go.
UNIDENTIFIED FEMALE: OK.
UNIDENTIFIED FEMALE: And two of them will have work for you.
UNIDENTIFIED MALE: I see you being more behind the scenes.
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CHETRY: Love is out, work is in. The psychic will see you now, ahead on the Most News in the Morning.
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JIMMY FALLON, HOST, "LATE NIGHT WITH JIMMY FALLON": The movie "Knowing" with Nicolas Cage won the weekend box office with $24.8 million, or as it's called at AIG a junior executive bonus.
(LAUGHTER)
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CHETRY: I wonder how long AIG is going to be the punch line. A couple more weeks?
ROBERTS: For a while, for a while. Yes, still get some lights.
CHETRY: Well, welcome back to the Most News in the Morning.
That's Jimmy Fallon talking about the movie "Knowing" in which actor Nicolas Cage can see into the future. Well, there was a time in real life when people went to psychics to ask when they're going to meet Mr. or Mrs. Right or if the person they're with is Mr. or Mrs. Right.
Well, now in our current economics, people are actually asking what their financial future looks like. Forget about love. Lola Ogunnaike has that for us.
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FARUSHIA, PSYCHIC READER: Close your eyes, relax, take a deep breath.
LOLA OGUNNAIKE, CNN ENTERTAINMENT CORRESPONDENT (voice-over): Dara has been unemployed for nearly six months and she's come to this psychic for answers.
DARA, CLIENT OF PSYCHIC READER: So how does it look for temporary work?
FARUSHIA: OK.
OGUNNAIKE: Fahrusha, one of New York's most popular psychics, doesn't need a crystal ball to predict what her clients are going to ask first.
FARUSHIA: Do you think my job is secure, and then it's like, do you think I'll keep my job. You know, really intense about job security. Previously for years and years and years, people just talk about love.
OGUNNAIKE: Forget romance. People are anxious about finance. Can all of that worry has been great for the psychic business?
(on camera): Have you noticed that your business is up?
UNIDENTIFIED MALE: It's definitely booming, yes. It's really incredible. My business has almost doubled since October.
OGUNNAIKE (voice-over): Dr. Simon Rego, a clinical psychologist, says he's not surprised that people are turning to soothsayers.
DR. SIMON REGO, MONTEFIORE MEDICAL CENTER: I think with the economy being a stress on people, stress provokes worry and we define worry as negative predictions about the future. So what people who have negative predictions about the future do is they turn to people who may seem to have answers about the future. Perfect role for a psychic to come in.
FARUSHIA: OK, I am seeing three different places where you can go.
DARA: OK.
FARUSHIA: And two of them will have work for you.
OGUNNAIKE: Dara says she has no problem paying $150 for that little peace of mind.
OGUNNAIKE: What about people who say, "Why don't you just save your money, why are you giving your money to a psychic?"
DARA: Would you save your money if you're going to a therapist? You know, it helps me mentally. It really helps me to think through the various options that I would like to see happen for my life.
DEREK CALIBRE, PSYCHIC READER: So I want to talk more about music here.
OGUNNAIKE: For $120 an hour, Derek Calibre will give you tons of advice, but it may not always be what you want to hear.
CALIBRE: I see some profile for you but not visually, not in front of the camera really. I see you being more behind the scenes.
OGUNNAIKE: Of course, I couldn't leave Fahrusha without having my fortune read.
FARUSHIA: Avoid - avoid plaid.
(LAUGHTER)
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CHETRY: If I paid $120 an hour and that was the only advice I got? I'd be steamed.
ROBERTS: You know what you can do is you can take $120, you can give it to a psychic to find out what your future is going to be, or you can take $120 and put it in the market and turn it into $90.00, so your choice.
CHETRY: Turn it into $90.00. What things are turning around? The Dow went up nearly 500 points at the open.
ROBERTS: Yesterday.
CHETRY: Yes.
ROBERTS: And today is a brand new day. Like Will.I.Am singing, "It's a new day." We'll find out.
CHETRY: Yes. We'll find out when the markets open in a couple of hours. 52 minutes after the hour.
Tough sell to America.
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BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Good evening, everybody.
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CHETRY: Before the president's big budget pitch in primetime tonight, his press secretary is with us live this morning.
Plus, pink slips on Wall Street. Ladies first?
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ALINA CHO, CNN GENERAL ASSIGNMENT CORRESPONDENT: You think this is gender discrimination?
BRITTANY SHARPTON, TERMINATED: Definitely.
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CHETRY: Women and the acts.
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UNIDENTIFIED FEMALE: The downturn comes, and whack, they're gone.
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CHETRY: You're watching the Most News in the Morning.
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ROBERTS: Welcome back to the Most News in the Morning.
These days you may have little sympathy for fat cats on Wall Street, who are getting the axe. But what if the pink slips are getting handed out unfairly? That's the charge from some women who work on Wall Street. And our Alina Cho joins us now to break down more of this this morning.
Good morning, and welcome back, by the way.
CHO: Thank you so much. It's nice to be back. It's an explosive charge, John. Good morning, everybody.
You know, it's no secret the banks have been laying off people by the thousands. But some women are charging that the recession has actually been an excuse to clear out the female population on Wall Street.
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CHO (voice-over): Demoted, pushed out, fired. In the past year and a half, three of the four most powerful women on Wall Street have left their job. Coincidence? Some say no.
UNIDENTIFIED FEMALE: Inevitably we have downturns. When the downturn comes, and whack, they're gone.
CHO: Susan Antilles (ph) says historically whenever we're in a recession it's an excuse to get rid of women working on Wall Street. Brittany Sharpton says it happened to her.
SHARPTON: At first I was just shocked. Like, you know, I'm thinking maybe I misheard.
CHO (on camera): You think this is gender discrimination?
SHARPTON: Definitely. I cannot think of any other reason or justification they would have for laying me off.
CHO (voice-over): The "Forbes" cover says it all, "Terminated." The 23-year-old is part of a class action gender discrimination lawsuit aimed squarely at Citigroup. Sharpton says it wasn't just her, that every woman in her group was laid off. And in some cases she says the women were more qualified than the men.
SHARPTON: I know for a fact that my male counterparts, some of them did not have the same credentials.
CHO: Her lawyer argues that it's all part of the Wall Street culture, the ultimate boys club.
UNIDENTIFIED MALE: When they're left with unfettered discretion as to who to choose, they're going to choose people they feel more comfortable with to retain. People they might go out to dinner with. People they might play golf with.
CHO: Others disagree and say the recession is gender blind.
UNIDENTIFIED FEMALE: We're in a horrible labor economy and it's hurting all walks of American life. Everybody - families, workers and investors are all getting hammered right now.
CHO: It's no secret the financial services industry is hemorrhaging jobs. The Citigroup layoff last fall included not just Brittany but 50,000 workers from executives to tellers. The company won't disclose the breakdown of men and women, but in a statement to CNN, Citi says, "The job cuts were done fairly and lawfully, based on legitimate business reasons unrelated to gender."
(on camera): Your response?
SHARPTON: Bogus, absolutely not true. There was just absolutely no discretion, no regard, not only with performance, but keeping a generation of women in the group.
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CHO: Now many we spoke to say the only hope for gender parody on Wall Street is to change the face of the corner offices. And so far, there's no evidence of a shift. None of the leading Wall Street firms has a single woman in any of the top three jobs and no woman has ever been named CEO of a major bank.
But John, a lot of people we talked to say that women simply do not have the networks on Wall Street that men do. There's no one really rooting for them. No one really advocating for them. And so there's - that plays a key role in all of this. Of course, the opponents, the critics say, you know, men and women are being fired in equal numbers. In fact, if you look at the numbers, the recession is actually affecting men more than women.
ROBERTS: But in terms of Wall Street, though, is anybody looking into this idea that women are being laid off at a greater rate than men?
CHO: Yes. In fact, I mean, if you look at the broader picture, men during the recession generally get hit harder because they're in jobs like manufacturing and construction, whereas women, typically, if you look at the broader picture are in jobs like health care and education which are more typically stable jobs. In terms of crunching the numbers, at Citigroup, they're doing that right now. These five women charge that they were fired unfairly.
ROBERTS: All right, thanks for that.
CHO: You bet.
ROBERTS: Alina, great to see you back again, too.
CHO: Hey, it's great to be back.
ROBERTS: Coming up now to the top of the hour. And here are the top stories that are on our agenda right now. After one of the best days on Wall Street in months, could we be on a roll?
The Dow jumping close to 500 points after the White House finally gave details on its retooled financial rescue plan. Also, coming up in the next 15 minutes here on the Most News in the Morning, shamed into it. New York Attorney General Andrew Cuomo says 15 top AIG executives have agreed to give back $50 million in bonus money. Cuomo says he hopes to get back about half of the $165 million in, quote, "retention payments," paid out by AIG.
And in a landslide, Vermont Senate voted to legalize same-sex marriage. If the bill becomes law, Vermont will become the first state to make gay marriage legal without being forced to do it in the courts - Kiran.
CHETRY: All right, John. Thanks.
