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AMERICAN MORNING

Internet Helps Stir Iran Protests; Obama to Unveil New Regulations for Wall Street; Clampdown in Iran, Government Confines Reporters; Senator Comes Out With Stimulus Waste List

Aired June 17, 2009 - 06:00   ET

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


JOHN ROBERTS, CNN ANCHOR: Good morning on this Wednesday, the 17th of June. A lot to tell you about in the "Most News in the Morning." Thanks for being with us. I'm John Roberts.

KIRAN CHETRY, CNN ANCHOR: And I'm Kiran Chetry. We are following many developments this morning, stories we'll be breaking down for you in the next 15 minutes.

Iran and the protests there continuing for a fifth day now, fueled by Twitter and graphic images on the Internet. The protests are spreading. The government is also stepping up its crackdown. And this morning we're tapping into the Internet following Iranians who become our eyes and ears on the ground.

A major decision from President Obama concerning same-sex couples in the workplace. He plans to extend health care and other benefits to gay and lesbian partners of federal employees. We're live at the White House with more details on that.

Also, there is a new plea this morning from the families of the two American journalists jailed in North Korea. Laura Ling and Euna Lee were sentenced to 12 years of hard labor for spying. Laura's sister, Lisa, is talking to CNN exclusively in her first public comment since the sentencing.

ROBERTS: We begin with developing news this morning in the fight for the hearts and minds of Iran. Despite jamming cell phone lines and banning the media from taking pictures on the street, the government has not been able to stop the flow of information. In what may become an Internet uprising, ordinary Iranians are using the on-line world to get the word out, and posting cell phone videos and images that the government does not want you to see.

CNN's Christiane Amanpour is live in London this morning, and Isha Sesay is live at our new Iran desk which is monitoring all of the communications coming out of Tehran.

Now, let's start with Christiane. And, Christiane, what can you tell us about the crackdown in Tehran? Can the government really silence this story?

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: You know, John, journalists are still there and obviously their visas are running out, and then they're leaving because they're not being extended. But they are still there and it is possible still to walk out into the streets as long as you don't bring a camera up and see what is going on. So there is firsthand evidence coming out.

Plus there is the Internet access, Twitter and the others. But I must say from my time there, it's very important to have that but there's a lot of unconfirmed and a lot of rumors that go on.

What's happening now appears to be the government is still allowing these protests to play themselves out on the street. And what you're seeing is kind of dueling but separate rallies, huge government- organized rallies for President Ahmadinejad and then those which the young people, the students, those who want the reform coming out in different parts of the city. The Mousavi rally yesterday was smaller than the one the day before which we attended.

ROBERTS: And, Christiane, President Obama seems to be putting a little bit of distance between the White House and the situation in Iran using very, very diplomatic and some people might say standoffish language to describe the situation there. Here's what he said to CNBC. Let's listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's important to understand that although there is amazing ferment taking place in Iran, that the difference between Ahmadinejad and Mousavi in terms of their actual policies may not be as great as has been advertised.

(END VIDEO CLIP)

ROBERTS: What's behind the strategy like that, Christiane, and particularly this idea as well that the president is saying he doesn't want to be seen to be meddling in Iranian affairs?

AMANPOUR: Well, I think -- look, I am not going to get into the House -- ahead of the White House or the president. I'm just telling you the facts from the ground that there is actually a difference between Mr. Mousavi and President Ahmadinejad most particularly in domestic policy. And that is why there's a divided nation on the ground right now. Those huge supporting crowds for President Ahmadinejad and that gathering momentum for reform.

And having experienced Iran for instance over the years of reform under President Hotami and seeing the complete difference in tone and the difference in reaching out to the world in terms of foreign policy and again tone compared to the four years of Ahmadinejad, it's almost night and day.

The president, on the other hand, is correct about foreign policy. There is foreign policy conducted by Ayatollah Khamenei, the supreme leader. And he is the one who deals with relations with the United States, the military policy, U.S. policy, and other foreign policy. So that is an important distinction.

But Mr. Mousavi had said that he wants to pursue detente with the rest of the world, including the United States. Whereas President Ahmadinejad also said that he does want to move forward but his public stance is much, much more confrontational and belligerent particularly over the all-important nuclear policy.

Now, it's true that Mr. Mousavi said that our nuclear program is not negotiable. But then there's a difference in how he said that he would allow the international community to verify and lay their fears at rest regarding their fears of militarization.

ROBERTS: Christiane Amanpour for us this morning live from London. Christiane, thanks so much for that.

CHETRY: And this morning, some of the loudest cries in Iran's deadly unrest are being heard on Twitter, an outlet that didn't even exist during Iran's last election. The networking service and also the broader Internet giving Iranians the power to get word to the world. One Iranian iReporter who did not want to be seen on camera sent us these messages.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE, IREPORTER: What you hear about filterings, cut of cell phones, short messages, they're all true. We're not able to send messages since the presidential election. And cell phones are cut or have limited access most of the time.

We were using social network Web sites like Facebook in particular to send videos, links and photos to keep our friends informed of the news before the elections. But exactly from the day after that, most social Web sites were filtered -- Facebook, Twitter, and any other Web sites that would spread the news, especially YouTube. The internet is very widespread in Iran, but what they do is that they make Internet slow so that people can't upload photos and videos.

(END VIDEO CLIP)

CHETRY: It's just a fascinating -- what we're getting from people who are using these social networking sites. Isha Sesay is live at CNN's new Iran desk monitoring Twitter and other social networking sites. And what else are you reading this morning Aisha?

ISHA SESAY, CNN INTERNATIONAL ANCHOR: Kiran, absolutely fascinating stuff dominating the Web. I mean, it's important to point out to our viewers as this post-election protests continue, authorities are really trying to clamp down on protesters and the use of the Web making it an all-important tool in effectively showing the rest of the world what is happening there.

We're hearing from YouTube today that the fight appears to be blocked there. They're getting a fraction of the traffic that they normally see from Iran, about some 10 percent. But the bottom line, Kiran, is people are still trying to get their message out. They want the world to see and hear what is happening.

We've been combing through what we're seeing on YouTube here at the Iran desk. And we want to show you this first piece of video. We think it's absolutely dramatic and our viewers need to know what is happening. We believe it was shot at some point over the last couple of days. We need to say right off of the bat, it is unverified. Nonetheless, you clearly see the scenes there playing out in Tehran, absolute chaos, people running, security forces basically lash out. Take a look.

You see the people running, trying to get out of the way. You shortly see them clash with a female protector.

You see her there, she goes down. She's still defiant. She still gets up. They're still getting their message out.

We've got some other pieces of video that we also want to share with you now. These protests started basically since Saturday. Also, the disputed result was made known on Friday.

On Monday, we saw tens of thousands of people gather in Azadi Square and you see the crowds there. They're out there. They're basically just making their voices heard. They're unhappy with this result -- Kiran.

CHETRY: Also, "The Associated Press" is reporting this morning that the Iranians -- the Revolutionary Guard, the powerful military force there is warning on-line media, Web sites as well as bloggers that they need to remove any material that would "create tension or face legal action." Is anybody weighing in on whether or not they've heard that as well?

SESAY: You know, we were just speaking to one of our editorial producers, (INAUDIBLE) at CNN international. And she says that she makes phone calls to Iranian Americans and they give her some insight into what's happening there in the country. They are telling her that people are genuinely afraid, Kiran. People are indeed -- some people are taking heed of those warnings and they're taking Web postings down and taking comments down because, yes, the fair (ph) is rustling up, Kiran.

CHETRY: Isha Sesay monitoring the Iran desk for us. A new tool that is certainly fascinating, and the coming days will be crucial as we continue to follow this story from Iran. Thank you.

And also, as we've been talking about, these next several days will also be crucial for determining the future of the country of Iran. Coming up, we're going to be talking to Iranian expert Karim Sadjapour.

ROBERTS: We are also following major developments at the White House this morning. President Obama is said to announce sweeping new regulations for the financial industry. And new rules are designed to protect consumers and prevent another Wall Street meltdown. And the president is also moving to extend health care and other benefits to the same-sex partners of federal employees.

CNN's Suzanne Malveaux is following it all for us this morning. She is the only reporter live at the White House this early.

Suzanne, let's start with the plan to extend benefits to same-sex partners. What do we know about that?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, we know that they're going to be releasing the details a little bit later. But essentially, it does involve extending some benefits to same-sex partners of federal employees, that it does fall shy of full health care insurance coverage because that would require an act of Congress. But this really comes amid intense criticism and frustration from the gay community supporters of Barack Obama. Been very disappointed with this president so far because the Justice Department filed this motion last week in support of the Defense of Marriage Act which is against same-sex marriage.

The administration has been slow to repeal the military's Don't Ask, Don't Tell policy and so you have a lot of gay leaders who are frustrated with President Obama. President Obama trying to do something at this point. And privately, John, there are people in the administration who say, look, the president is for gay rights but he is taking his time and actually moving forward in some of these very important issues.

ROBERTS: On the big news today, Suzanne, is the overhaul of regulations in the financial world the president is going to be talking about. What should people be watching for in all of this?

MALVEAUX: Well, it's extraordinary, John. It's an 85-page proposal. The president is involved, economists, a whole bunch of folks involved in this. But essentially what it does is three main things.

It gives the Federal Reserve greater power, greater oversight of financial institutions, banks, insurance companies. What it also does as well is that it's going to ask Congress to give the administration greater power when it comes to picking apart firms, dismantling firms that fall into financial trouble so that they don't actually continue to lag of all of the problems that go on.

And then finally, creating a whole other agency to protect consumers who have credit cards, who need -- who have mortgages, who need help, who need assistance.

You can imagine, John, folks are looking at this, scratching their heads and saying, boy, this looks like an awful lot of government involvement in so many different ways and that Congress is going to kick in and essentially tomorrow start holding hearings on what makes sense, what doesn't make sense, and what are they actually going to help this government push through.

ROBERTS: And many people also wondering whether or not these regulations will be enough to long term look after and oversee...

MALVEAUX: Absolutely.

ROBERTS: ... and oversee the ever-evolving financial services industry.

Suzanne, thanks so much. We'll see you again soon.

MALVEAUX: Thanks, John.

ROBERTS: And at the bottom of the hour, by the way, we're going to break down the new financial rules of the road with two experts, Eamon Javers, who's the financial correspondent for "Politico," and investment adviser Ryan Mack will be joining us here.

CHETRY: Under stories news this morning, NASA forced to scrub its early morning planned launch of the space shuttle "Endeavour." This is the second time they've had to do this in less than a week and for the same reason. There was a hydrogen gas leak that unexpectedly reappeared, according to the astronauts. "Endeavour's" mission to the International Space Station has now been put off until July 11th.

Rhode Island is now the third state in the nation to permit the sale of marijuana to chronically-ill patients. The state assembly voting overwhelmingly to override the governor's veto. The new state law allows up to three nonprofit stores to sell marijuana to patients who are registered with the Rhode Island Department of Health.

And we're "Minding Your Business" this morning. It's now the 50th straight day that we've seen gas prices inch higher. According to AAA, the national average for a gallon of regular is now up to $2.68, and that's up a little bit less than a penny from yesterday.

(COMMERCIAL BREAK)

ROBERTS: We're back with more on our breaking news this morning. Pressured by a fourth day of mass street protests, Iran is clamping down. Reporters have been confined to their rooms and they're jamming phones and radio transmissions in Iran.

Joining me now to talk more about the crackdown and the deadly unrest, Karim Sadjapour. He's an Iranian expert with the Carnegie Endowment for International Peace.

Good morning to you. So where do you see this all heading, Karim?

KARIM SADJAPOUR, IRAN EXPERT, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: It's difficult to say, John. A lot of it depends on what the opposition leaders decide to want to do. Certainly, there's a tremendous sense of outrage in Tehran. Not only in Tehran, throughout the country, there's a tremendous sense of injustice that these young people have.

At the same time as a country which endured an eight-year war with Iraq, people are allergic to the prospect of further carnage and bloodshed and violence. But at the moment, I think there's truly a sense of outrage and I see these protests continuing.

ROBERTS: This development that the Iranian Revolutionary Guard Corps, the government has told people to stay inside. The IRGC is saying if you put up certain materials on blog sites you could face legal charges. How big a role is the Revolutionary Guard Corps and this paramilitary organization, the Basij playing in trying to tamp down these protests? SADJAPOUR: Well, they're playing a definitive role. But what's been amazing is that they haven't dissuaded people from going into the streets. Historically, when the regime has announced that the Basij (ph) and the Revolutionary Guards are authorized to use force to shoot people, that will quell the protests. But so far, we haven't seen the protests really quelled.

The other day there were several thousand people in Iran, and it just gives you an idea how outraged people feel that they're willing to go out into the streets and risk their lives.

ROBERTS: And this rule and Guardian Council which has said that it will recount certain parts of the election. Of course, Mousavi and his supporters are calling for a new election. How far do you think that they will go in that? You know, are they just playing for time here, hoping that all the protests will die down and eventually people will get tired of going out in the streets and accept the results of the election? Or might this actually lead to a new election? Can they resist the will of the people?

SADJAPOUR: Well, you know, the Guardian Council is not like our Supreme Court. It's not an objective entity. It's essentially under the regime (ph) of Ayatollah Khamenei, the supreme leader. And I think Khamenei deferred to the Guardian Council simply as a tactical move to buy time.

But Khamenei maybe faced with the dilemma and it may be one day soon whether to sacrifice President Ahmadinejad or sacrifice himself. Because it really is -- it's really gotten to the point where people are calling for the head of Khamenei, and this is unprecedented in the last 20 years.

ROBERTS: Khamenei has been supreme leader since 1989. This is, as you suggest, all about his survival as well. Right now, he's hitched his wagon to Ahmadinejad who's got the loyalty of the Revolutionary Guard Corps and the Basij. I mean, can you foresee any circumstances under which he might for his own survival throw off Ahmadinejad overboard?

SADJAPOUR: I think it's certainly within the realm of possibilities. And I would argue, John, that Ahmadinejad doesn't necessarily have the loyalty of the Revolutionary Guards and the Basij.

I was based in Iran for a couple of years and I spoke to many of these young people within the IRGC and the Basij who recognize that this death to America culture of 1979 is obsolete today and Iran will never achieve its full potential unless those reforms made in the political, economic, social realm. So I think that we shouldn't take for granted the fact that although the regime shock troops are necessarily going to side with President Ahmadinejad.

ROBERTS: So what would it take to really sort of initiate that huge fracture because as we see now, the Guard Corps and the Basij are on the side of government?

SADJAPOUR: Yes. We have to get inside the head of Ayatollah Khamenei, again, the supreme leader. And he's always under -- his world view is very clear. When you're under siege, never compromise because if you compromise, it's going to project weakness. If he orders a major clampdown, I think we may start to see fissures within the regime shock troops.

ROBERTS: All right. We'll see what happens. We'll keep watching. Certainly a fascinating story.

SADJAPOUR: It is.

ROBERTS: Karim Sadjapour, it's good to see you this morning.

SADJAPOUR: Thanks, John.

ROBERTS: Thanks so much for coming in.

SADJAPOUR: Thank you.

ROBERTS: It's 18 and a half minutes now after the hour.

(COMMERCIAL BREAK)

CHETRY: A beautiful shot this morning of Lady Liberty, New York harbor. Welcome back to the "Most News in the Morning."

Right now, it's 57 degrees here in New York. It's going to be going to up to 66. Mostly cloudy. You wouldn't know that summer is just around the corner in this city, at least.

Well, developing this morning, more nuclear rhetoric coming from North Korea. Pyongyang promising to retaliate "a thousand-fold" if provoked by the United States. And that new warning comes as President Obama declared the communist regime a "grave threat to the world," and said that there would be new U.N. sanctions aggressively enforced.

Meantime, North Korea revealing for the first time the evidence against Laura Ling and Euna Lee. These were the two American reporters who were detained at the China-North Korea border and sentenced to 12 years of hard labor at a secret trial. Lisa Ling is talking publicly for the first time after her sister's sentencing and she spoke exclusively with CNN's Anderson Cooper.

(BEGIN VIDEOTAPE)

ANDERSON COOPER, CNN ANCHOR: Lisa, I mean, does it concern you that the North Korean government is saying that they were there for a smear campaign not acknowledging that they were independent journalists?

LISA LING, LAURA LING'S SISTER: All we can say is that they are journalists and they were doing their job. My sister has been a journalist for years. And that's really all we say.

You know, we weren't in the courtroom. We don't any sort of specifics other than what was released. We just hope, you know, given the fact that we know the girls have apologized profusely, that they will let the girls come home to us. It's been -- it's been three months and that's been too long.

Since the verdict, no one has seen them. So frankly, we don't even know exactly where they are. And we're particularly concerned about their mental state because when you tell two women that they've just been convicted and sentenced to 12 years hard labor, we can't even imagine what they're feeling and what they're going through. I mean, I'm sure they are just traumatized. And because we haven't heard anything from them or about them, we are particularly worried.

COOPER: If by some chance they are able to hear this or someone in North Korea is hearing it who can pass along something to them, what will you say, Lisa?

LING: I would just tell the girls to please stay strong and know that we are trying to do everything we can. Our government is trying to do everything they can to try and bring you home and to just focus on the day when we can all be together again is what I would say to the girls.

(END VIDEOTAPE)

CHETRY: It's such a horrific situation for that family right now. They don't know anything. They're still trying to figure it out.

ROBERTS: Particularly since their loved ones, they're just not caught up in the judicial system or what passes for a judicial system there, but they're all wrapped up in this whole nuclear standoff with the United States too. So, obviously, being used as a bargaining chip, increased value for them and increased tension and angst for the families. Just incredible what they've gone through there.

Twenty-four and a half minutes now after the hour.

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the "Most News in the Morning." President Obama is promising the nearly $800 billion stimulus bill will put more Americans back to work and help kick-start the economy. But some Republicans argue that the giant spending plan is wasting your tax dollars.

CNN's Deborah Feyerick is with us this morning, and she's looking into all of this. I particularly am a fan of the turtle cross.

DEBORAH FEYERICK, CNN CORRESPONDENT: Yes, it's the turtle tunnel as they call it. And, you know, it's really interesting because the Republican who put out a report recently, he's actually considered a friend of the president. Senator Tom Coburn warning the government could waste as much as $55 billion over five year if these projects aren't monitored closely.

(BEGIN VIDEOTAPE)

FEYERICK (voice-over): Retiree Antoinetta Santopadre got a stimulus check in the mail worth $250. Actually, the check was for her dad. The problem is, he's been dead for 35 years. ANTOINETTA SANTOPADRE, RETIREE: I was really, yes, upset when I got the check because what are they doing with our money? Where is it going? Who's in charge?

FEYERICK: You hear those questions a lot lately. Oklahoma Senator Tom Coburn coming out with a report slamming the nearly $800 billion stimulus package which he voted against saying too many millions are being spent on projects that are either wasteful or create too few jobs.

SEN. TOM COBURN (R), OKLAHOMA: The fact is for every good project, there's one that's not. And that's the problem with rushing a bill through the way we did and not doing our job to make sure that money gets spent appropriately.

FEYERICK: Among the projects the senator criticized is a $1 billion to build a coal-based power plant in Illinois that the Department of Energy rejected as outdated. Millions spent to rebuild little used bridges which Coburn calls not high priority. And $3 million to build a wildlife tunnel underneath the Florida highway where over 60 species have been killed by cars.

Tom Schatz is with the taxpayer watchdog group that tracks government spending.

TOM SCHATZ, CITIZENS AGAINST GOVERNMENT WASTE: The way the stimulus is written is that only certain projects qualify. It doesn't mean they're the most important or the best. It's just written in a way that shoves the money out the door just to get something done.

FEYERICK: The White House dismissed Coburn's report saying out of 20,000 approved projects, it has shut down those revealed to be wasteful.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: There are a number of entries throughout this report that are just simply wrong. This president has taken historic steps to ensure that there is adequate transparency and that this money is spent the way it's intended to be used.

FEYERICK: As for Santopadre's unexpected $250 windfall?

SANTOPADRE: I want a frame it. And I want my kids to have that. Just in case this happens again, if they want it, they've got to come and get it. And then they got to give me some kind of explanation other than that.

(END VIDEO CLIP)

FEYERICK: Now, how did it happen? Well, the White House did just that, offering some sort of an explanation, releasing a detailed analysis of where projects stand, including that proposed coal plant. The stimulus may have to be used for construction only if it passes a number of reviews. And as for that so-called turtle tunnel, well, still under consideration.

ROBERTS: All right. Deb Feyerick for us this morning. Deb, thanks so much for that.

Here's a check of our top stories now. Thirty minutes after the hour.

A clampdown in Iran. Supporters of the opposition leader stayed put on the street, demanding a new election. But the government now banning reporters from covering the demonstrations.

Also, as part of the crackdown, troops are going door to door removing or destroying satellite dishes. They are also jamming radio transmissions. Also as part of the crackdown, troops are going door- to-door removing or destroying satellite dishes. They are also jamming radio transmissions.

And this morning, growing concerns in Congress about the National Security Agency's ability to intercept private e-mails and phone calls of Americans. "The New York Times" reporting the agency went beyond the legal limits established by Congress last year. Under the surveillance program, the NSA has the power to collect private communications from Americans as long as it's a by-product of an investigation of the people believed to be overseas.

And what's the first city that comes to mind when you think of road rage? The city with drivers most likely to yell, honk or give you that one-finger salute?

Well, if you said New York, you'd be right. The "Big Apple" back on top in a new study as the city with the angriest drivers. Miami has been number one for the past five years, but New York reclaimed the top spot this year. Other cities with angry motorists -- Dallas Fort Worth and Detroit. The cities with the friendliest drivers -- Portland, Cleveland and Baltimore.

KIRAN CHETRY, CNN ANCHOR: How about that? Well, you live in both Miami and New York. Which one is worse?

ROBERTS: They are about the same actually. Except you're not likely to get shot in New York. You just might in Miami.

CHETRY: All right. Well, in my town, the second the light turns from red to green, people behind you honk. I mean, they don't even give you a second to hit the gas.

ROBERTS: Well, New York, they don't even wait for it to turn green.

CHETRY: That's true.

ROBERTS: It's (INAUDIBLE).

(CROSSTALK)

CHETRY: That's optional. Red is optional stuff.

All right. Well, in just a few hours, President Obama is going to be spelling out new rules of the road -- different road, for banks and other financial institutions. And they include some new powers for the Federal Reserve and also a new agency to protect consumers against industry abuses.

The devil's in the detail, as you like to say. Joining us now to break it down from Washington -- Eamon Javers, he's a financial correspondent for the "Politico," and also investment advisor Ryan Mack, the president of Optimum Capital Management.

Thanks to both of you for being with us. We just love for you guys to help us break some of this down.

First, of course, as we know the government stepped in to save AIG and GM. And the second part of the goal was to ensure that we don't find ourselves in these situations again with these emergency bailouts. So, they want to change some of the rules.

What do you think is the most important aspect of this plan? And I'll start with you, Eamon.

EAMON JAVERS, FINANCIAL CORRESPONDENT, "POLITICO": Yes. Well, the biggest thing here is that the Federal Reserve is getting new powers to wind down firms that they think are systemically dangerous. That is, firms that are on the verge of collapse that could take the whole economy with them if they fail. That's a big new shift of authority to the government.

But what the president has been saying here is that the bailout that we've seen, all that money going to private companies, that's what he had to do to stop this emergency. In many ways, this financial regulatory reform, it's coming up today, is what he wants to do. This is designed to set the rules of the road for the coming generation, really, to try to prevent what happened last fall from ever happening again.

CHETRY: All right. Well, one of the things that it doesn't do is ban any financial products. That was something that most likely would face a lot of trouble and probably wouldn't be worth the political capital with the calculation that was made. But it does put some new restrictions on risky investments.

Ryan, what are we talking about here?

RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Well, essentially, I think the financial services industry, which is why I'm a strong supporter of the financial services consumer protection agency. You know, as someone who is in the financial services business and makes a living off of it, the question is, do we need someone else looking over our shoulder?

And when you hear the stats from the First American Loan -- First American Loan performance, say that 55 percent of all subprime mortgages could have been conventional terms or had better terms in 2005, 2006. 61 percent of all subprime mortgages could have been had better terms. We're not giving out products that are suitable for our clients. We're not making sure that at the end of the day, this individual is suitable to have this sort of an investment.

CHETRY: And Ryan, will this -- you mentioned this subprime issue and it's a very, very upsetting subject for many to talk about.

Would these new rules cover that? Meaning, if you qualify for something better, will the federal government make sure that the bank or the lender is giving you the right deal?

MACK: Yes, it's going to be another watchdog. Somebody over there going to make sure that it is suitable. Again, you know, it's going to mitigate some risks. We're not going to sit here and say that the banks are going to be taking as much risk as they used to. They're not going to be able to push these products on these consumers as we want would be able to.

So, some risks are going to be mitigated. But you know what? That 2004 to 2007 rally was only real on paper. And that was largely in part because we were giving away products and selling products and making tons of money and had nothing to cover it.

So I think that this is a great step in the right direction. But the next step I think is, now let's stop pushing additional education for the consumers to make sure that when somebody sees a Hello Kitty credit card, that's not necessarily the credit card that's fit for them. Because, you know, that should be in there as well.

CHETRY: And Eamon, you have been posting some articles for the "Politico" on this. And what do you think the administration will bump into or run up against as they try to get some of these in place in Congress? In terms of politically speaking, what's going to be a challenge?

JAVERS: Yes. Well, there's a couple of challenges. I mean, obviously, this is a huge and sweeping plan. It's not quite as sweeping as we thought it might be just a couple of weeks ago. But one thing they're going to run into is that just about every member of Congress has his or her own ideas about how this should go. And so there's going to be a lot of cooks in the kitchen here as they get this done.

The other thing they're going to run into is a lot of complaints from folks that this is too much government intervention in the private sector. This is simply government overreach here.

And Barack Obama talked about that a little bit yesterday in some television interviews. And he said, hey, wait a second, I feel like the Wall Street guys forgot how close to the brink we actually got last year. And he's basically sending a warning shot across their bow, saying we need this kind of government financial regulation because you guys, the capitalists on Wall Street, are the ones who ran the system into the ground and we now have to set up these new rules of the road to keep that from happening again.

But that's going to be an ongoing fight throughout this debate as whether this is just simply big government -- too much government will hurt the economy in the long run. You're going to hear that from some quarters, definitely.

CHETRY: All right. Eamon Javers as well as Ryan Mack, great to talk to both of you this morning. Thanks for being with us.

And one programming note, coming up at 7:15, we're going to be speaking to Christina Romer. She the chair of the White House Council of Economic Advisers and she's going to talk more about this plan as well with us.

Right now, it's 37 minutes past the hour.

(COMMERCIAL BREAK)

ROBERTS: The Oscar success of "Slumdog Millionaire" drew a lot of attention in India's Bollywood, famous for churning out wildly optimistic movies, always with a song and dance number. Business had been booming but India's film industry is getting a dose of financial reality.

CNN's Sara Sidner is live in Mumbai for us this morning looking at Bollywood's budget crunch.

Good morning, Sara.

SARA SIDNER, CNN CORRESPONDENT: Good morning, John. You know, some here in Bollywood are singing the blues because of the world economic downturn. But others see a silver lining in all of this.

(BEGIN VIDEOTAPE)

SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT: Dozens of swirling bodies, colorful costumes and pulsating music. This is what Bollywood is known for. India's film industry pumps out almost 1,000 films per year. Twice as many as Hollywood at a fraction of a cost. Even so, a financial drama has arrived in Bollywood. The industry has been hit with a double whammy courtesy of a producer strike and the world economic downturn.

Analysts say 30 percent fewer films have been made so far this year. Ticket sales are down. And the gush of money that float into India from abroad to finance film a year ago is now just a trickle.

NIKHIL ADVANI, DIRECTOR/PRODUCER, PEOPLE TREE PRODUCTION: It's difficult. It's become very difficult.

SIDNER: Bollywood producer and director Nikhil Advani said it's all about fiscal discipline and solid planning. Gone are good days of whimsical guesses and wild overspending.

ADVANI: We're basically trying to break it down to the budget, to the last drop of water that is going to be drunk on the set. We break it down completely.

SIDNER: The budgets are so tight these days, in some cases, superstars are being asked to take pay cuts and only get paid their full fee if the film does well. In other cases, accountants are arriving on the set daily to crunch the numbers.

FAROKH BALSARA, MEDIA AND ENTERTAINMENT ANALYST: They are daily monitoring reports coming in to see where are we, as well if deviating from the budget and what corrective actions have been taken.

SIDNER: But movie maker, Nikhil, says the economic downturn will actually benefit Bollywood in the end, forcing it to be more focused and produce better films.

ADVANI: I don't call it a period crunch; I call it a period correction. I think what has happen is corrected itself, because I think Bollywood or the Indian film industry was going absolutely crazy last year.

(END VIDEOTAPE)

SIDNER: Advani says the bottom line is, you better have a plan or nobody, no matter what your name is, is going to pay for your film.

John?

ROBERTS: We see what happens in Hollywood when movies go wildly over budget. So everybody is doing a little belt tightening these days. Sara Sidner for us this morning in Mumbai.

Sarah, thanks so much for that.

And to find out more about Bollywood on a budget, join the conversation on our blog CNN.com/am.

It's now coming up to 43 minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Forty-five minutes past the hour. We fast forward through the stories that will be making news later today. This afternoon at 12:50 p.m. Eastern Time, President Obama is going to be proposing sweeping new regulations for financial companies and the markets. His new rules design to protect consumers and to prevent another financial crisis.

Coming up in about 30 minutes, we're going to be talking to a White House official about all of it.

Also in just a few hours, two House subcommittees will take on North Korea's nuclear ambitions. This joint hearing is going to be focusing on North Korea's recent nuclear tests as well as the stalled six-party talks.

And tonight, 7:30 p.m. Eastern Time, former president George W. Bush will be the keynote speaker at the Manufacturer and Business Association's annual event that takes place in Erie, Pennsylvania.

John?

ROBERTS: You're probably used to having information at the tips of your fingers. But soon you can have it in your line of sight as well. CNN's Gary Tuchman has got the story in this week's "Edge of Discovery."

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: In movies like "Terminator," robots can do anything with their eyes. But bionic vision isn't just for Hollywood anymore. Researchers at the University of Washington are hard at work creating so-called electronic lenses, contact lenses with a computer-like display.

BABAK PARVIZ, UNIVERSITY OF WASHINGTON: The lenses will create an image that is suspended in air about a foot or so in front of the eyes.

TUCHMAN: Each lenses equipped with tiny electronics and antennas that could communicate with your cell phone, laptop or other helpful gadgets.

PARVIZ: For drivers, you could display possibly what they are seeing in the GPS system directly on their contact lens.

TUCHMAN: Since the images are semitransparent, they won't block your line of sight. Researchers say virtually anyone -- gamers, fighter pilots, doctors or just people with bad eyesight could benefit from the technology. But it's going to be a while before you can surf the Web while strolling down the sidewalk.

PARVIZ: The human eye is very, very sophisticated, and at the moment we're nowhere near being able to create something that resembles that.

TUCHMAN: Gary Tuchman, CNN.

(END VIDEOTAPE)

CHETRY: Put those things in your eye. You wore contacts.

ROBERTS: YES. Well, I only wear contacts for a couple of hours or three hours a day, actually, to read.

CHETRY: Just to read.

ROBERTS: Just to be able to read the teleprompter. But, I mean, all of this stuff is fascinating where all this technology is going. It's really incredible.

CHETRY: I know. But, I mean, we're already so attached to these things -- these blackberries and, you know, our phones. Imagine having it in your eye.

ROBERTS: I actually put that away for one day on the weekend, and it felt so good.

CHETRY: Yes, it does feel good. Shut it off.

ROBERTS: Really good.

CHETRY: Well, time now to check on our A.M. Pix. These are some of the great shots that caught our eyes overnight. Lightning blazes through the skies. This is in Cherokee County, Missouri. Two storm systems hit the Midwest yesterday. Rob was talking about it on our show. Well, check that out. It also cause some heavy rain and flooding in some areas.

This is a tiny, Amur tiger cub getting some attention from his mom. That's a bath in tiger world, right? This is at a Highland Wildlife Park in Scotland. The baby tiger is one of three new cubs that were welcomed at the park.

And this statue might have caused some rubber necking on the road. It's a hitchhiker made out of traffic cones. It's pretty creative, huh? Police in North Carolina actually charged the college students who made it with possession of stolen goods. But it seems that he's become quite a celebrity artist of sorts. The construction company he took the barrels from actually said they want to keep that roadside monster. They think it's pretty cool.

ROBERTS: How could you charge somebody for doing that? It's really creative.

Forty-nine minutes now after the hour.

(COMMERCIAL BREAK)

ROBERTS: Oh, fly me to the moon -- or not. Welcome back to the Most News in the Morning.

Another disappointment for NASA's shuttle launch team. For the second time in less than a week, they were forced to scrub the launch of the space shuttle Endeavour, and the problem was the same thing -- a hydrogen gas leak. So, what to do now?

CNN's John Zarrella live at the Kennedy Space Center for us this morning.

NASA has seen this problem before with another shuttle. And now it looks like it's delayed until the middle of July, John. What's going on? Why can't they fix this?

JOHN ZARRELLA, CNN CORRESPONDENT: Yes, that's exactly right, John. In fact, it was back in March on the shuttle Discovery when they first had this problem, this hydrogen leak. It was delayed. They managed to fix it and get Discovery off the ground.

And now twice in the last four days on Endeavour, they've had the same problem or virtually the same problem in the same exact place. It's an area where the external tank, the giant external fuel tank, connects to a pipe that takes excess hydrogen gas away from the vehicle so you don't have any fire or explosion on the launch pad. So, dangerous situation.

Now, NASA managers, very disappointed early this morning, came out and said that clearly they do not understand this problem. They're going to have to go back to square one and figure this out. The next earliest attempt to launch the shuttle Endeavour would be July 11, but that's only, only if they can figure out what the problem is -- John.

ROBERTS: So, as I recall back in March when the other shuttle was up there in orbit fixing the Hubble space telescope, this shuttle was on the launch pad getting ready for a potential rescue mission. What does this hydrogen leak say about the possibility that that shuttle could have been used if something had gone wrong up there with the Hubble?

ZARRELLA: Well, it really brings in question if the Atlantis crew had got in trouble, Endeavour, which was at Pad B at the time, was scheduled to be the rescue vehicle, it would have launched within a few days of the problem on Atlantis and the crew, it wouldn't have been able to launch. So, it's a good thing, a very good thing, that that scenario never played out.

John?

ROBERTS: Yes, for a number of different reasons, yes. John, thanks so much for that. John Zarrella for us at the Kennedy Space Center this morning.

Kiran?

CHETRY: Well, we're coming up in about six minutes before the top of the hour. We're going to check in again with Christiane Amanpour, who's been in Iran following the aftermath of the elections there, day five of protests continuing and the importance of the social networking sites in helping people get out the message.

Also coming up in about 15 minutes, we're going to be speaking with one of the advisers at the White House who is going to be talking more about these new regulatory reforms and whether or not they're going to make a difference in making sure that another financial crisis doesn't happen again.

Fifty-five minutes past the hour.

(COMMERCIAL BREAK)

CHETRY: Good morning. A developing story right now -- the uprising, the demonstrations and protests that have been taking place in Iran. It's a startling sight, young Iranian women in the streets openly and angrily protesting. One reason is their widespread affection for the wife of President Mahmoud Ahmadinejad's biggest rival.

Carol Costello is live in Washington with more on the woman that they're calling Iran's Michelle Obama.

Hey, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: She's been quite an inspiration to women in Iran, Kiran. I don't know if you notice, but there are no female Cabinet ministers in Iran. Iranian women are pretty much second-class citizens in criminal matters, divorce, child custody and inheritance cases. President Ahmadinejad has even tried to make it easier for men to take more than one wife. So for women activists living here in the United States, the sight of Iranian women protesting is a great source of pride.

(BEGIN VIDEOTAPE)

(PROTESTERS CHANTING)

COSTELLO (voice over): Braving violence, even prison, Iranian women have proved to be fearless. For Iranian women living here in the United States, seeing women on the front lines of protest is striking. Ask them if they're proud --

AZAR NAFISI "READING LOLITA IN IRAN": Oh, you bet your life. Yes.

COSTELLO: Azar Nafisi is in awe of them. She wrote "Reading Lolita in Tehran," a bestselling book about in part the erosion of women's rights in Iran.

NAFISI: They proved not just their existence, but their right to exist the way they want to.

COSTELLO: Nafisi says of all of the protesters who feel cheated at the polls, Iranian women may feel it most. In Ahmadinejad's rival Hossein Mousavi and especially in his wife, feminists have finally found a powerful voice to help achieve their goals.

The love young women have for Rahnavard, apparent at a pre-election rally.

SAHKIBA SHAKER, MIR HOSSEIN MOUSAVI SUPPORTER: We look at her and we see that we will be like her in the future.

COSTELLO: Iranian women call Zahra Rahnavard their Michelle Obama. She has a PhD, authored 15 books and like the American first lady, she's not shy about showing love for her husband. Except in Iran, this is a courageous act because it could get you a reprimand from Iran's morality police.

NAFISI: They see in her the potentials for what they want.

COSTELLO: Under President Ahmadinejad's regime, dozens of women have been jailed for participating in a grassroots women's rights campaign called One Million Signatures. Some say their continued efforts coupled with Zahra Rahnavard's public strength intimidate hardliners. Apparent, some say, in a pre-election debate when Ahmadinejad took the unusual step of accusing his opponent's wife of not being qualified to teach.

PRESIDENT MAHMOUD AHMADINEHAD, IRAN (through translator): She got PhD without attending the university entrance exam and then she's now an assistant professor without any qualifications. She's now heading the faculty. This is lawlessness.

COSTELLO: But her record is legit. And thousands of Iranian women continue to rally for her husband's victory, no matter the cost.

(END VIDEOTAPE)

COSTELLO: And you know what, Kiran? Even if Ahmadinejad retains his presidency, women will consider it a victory. The very fact Iran is considering a partial recount means they forced the government to take them seriously.

CHETRY: Certainly fascinating. Carol Costello for us this morning. Thanks so much.

And we're coming now right at 7:00 here on the East Coast, 4:00 a.m. on the West Coast. Welcome to AMERICAN MORNING. I'm Kiran Chetry.

ROBERTS: And good morning to you. I'm John Roberts.

Here's what's on the agenda this morning, the big stories that we'll be breaking down for you in the next 15 minutes.

The clampdown in Iran. All foreign journalists now banned from covering demonstrations on the streets, told to stay in their hotel rooms, but we have the pictures that the Iranian government does not want you to see. Our Christiane Amanpour on the government crackdown and its attempt to control the message.

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