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Taking Stock One Year Later; President Obama on Wall Street; Police Find Body in Wall at Yale; Video Captures Insurgents Killed by Own Blast
Aired September 14, 2009 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Missing person case is now a homicide. Investigators find what they believe is the body of a Yale graduate student.
The party's over, but will the anti-government fervor go on? We look beyond the weekend's tea party rally.
And new terrorist message -- an audiotape linked to Osama bin Laden calls President Obama "vulnerable."
Good morning, everybody. I'm Heidi Collins in New York this morning. It's Monday, September 14th, and you are in the CNN NEWSROOM.
Christine Romans this morning takes stock. One year ago today, a financial icon collapsed and every American felt the aftershocks. Where does the crisis stand today? We'll talk about that.
And also, the president weighs in. Suzanne Malveaux previews his speech on Wall Street. He says he wants new ways to protect your money.
And personal finance editor Gerri Willis looks at your retirement savings then and now. How has your 401(k) fared -- I think we know the answer to that -- over the past year.
To fully appreciate just how catastrophic the collapse was, let's take stock of this past year. On September 15th, 2008, the Dow opened at 11422. Remember that? And then the bankruptcy filings sent investors reeling. It triggered panic and more financial failures.
Two months later on November 20th, the Dow had plunged to its lowest point in 15 years. Today, the market opens at just over 9600 points.
In the one year since Lehman Brothers collapsed, the Dow has reclaimed more than 50 percent of its losses.
We do have a lot of ground to cover this morning, so let's get right to it this morning now. Christine Romans, part of the CNN money team. She, of course, joining me here in New York this morning.
All right, so, it's kind of an interesting question, because it's the worst of times, the best of times. You know there has been a lot of change since all this happened and again, there's really been no change whatsoever.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Right. Everything is changed for you and me and for companies who are hiring people and for the people who are working in the economy and nothing has changed in terms of regulation of Wall Street.
I mean, the very same policies and practices and laws, in effect, that didn't prevent this crisis are still in effect. And the president's efforts to try to reform the system so far have met with pretty much a yawn on Capitol Hill.
How do we deal with these companies that are too big to fail? Many people will point out, Heidi, that the companies that were too big to fail before are even bigger now and even that much more important in the global economy.
What will be the new role of regulators? You still have a patchwork of regulation covering all of these different financial companies. Risk taking is still an issue and so is executive pay. We haven't really gotten to the core of that yet.
So, everything has changed in the past year. We went from panic to now we've stepped back from the brink, as the president says, but nothing has changed in terms of the system.
COLLINS: Yes, absolutely. Good point. One year later, though, should Lehman Brothers have been saved? Obviously, there's still a lot of debate about that.
ROMANS: It is incredible over the past year how much people have talked about this, that Lehman should have been saved, it would have prevented the entire crisis, but there's this new consensus emerging that Lehman was a symptom of the problem. It wasn't the problem.
When Lehman failed, of course, it was cascading after that, the panic on Wall Street. But many people say, if you would have saved Lehman, something else would have gone down, maybe a company even bigger and more important.
And that the failure of Lehman actually galvanized policymakers and the public into agreeing that something big and dramatic and massive in terms of intervention in the economy -- AIG, Fannie and Freddie and others -- would have to be done.
COLLINS: Yes, I -- before we go, I have to ask you the situation with credit now because that really seemed like this was certainly the straw that broke the camel's back with regard to credit. Nobody could get any money or any loans.
ROMANS: And the worst of it is behind us. I mean there was -- basically, parts of the economy shut down after Lehman's collapse. I mean, shut down. Companies couldn't breathe. They couldn't get the credit that they needed.
That has improved, but as you know, we are not lending -- the credit is not flowing the way it was before this happened. COLLINS: That true. How much longer, Christine? Come on.
(LAUGHTER)
ROMANS: I'll see what I can do.
COLLINS: All right. Very good. Christine Romans of our CNN money team. Thanks,Christine.
ROMANS: Sure.
COLLINS: Well, as you know, within the hour now, President Obama leaves for his speech on Wall Street. There he will call for new safeguards to prevent another financial collapse.
Last night on CBS' "60 Minutes," he said it was the aggressive action by his administration that rescued a financial system on the brink of disaster.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What I think is a legitimate concern, because this did happen under my watch, is that we initiated a big recovery act, $800 billion, and the reason we did so was that every credible Democratic and Republican economist at the time when we came in said, if we don't have the stimulus of some sort, then this is potentially going to get a lot worse.
(END VIDEO CLIP)
COLLINS: Let's take a closer look now at the president's speech, with White House correspondent Suzanne Malveaux.
Suzanne, good morning to you. Clearly, he is using this anniversary to really drive home a message here. But is it a message just for people on Wall Street, or is it all of America?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Heidi, he certainly is going to the belly of the beast, if you will, addressing Wall Street. But there are other audiences as well that he wants to hit. Obviously, the American people to give them a sense of encouragement, reassurance that the economy is turning around, but also members of Congress.
He's really trying to put pressure on them to move forward in legislation. A couple of key points he's going to make. He's going to say, this is what the administration has done so far. $787 billion economic stimulus package, the hope to create jobs here. That they have pulled back from the brink, the economy, that it is not the great depression that they had feared.
He's going to say more week needs to be done and he is going to make a distinction, as we had heard before, between what happened on his watch and what he inherited, essentially. Because we are talking about nearly nationalizing two auto companies sections of the banking industry, that type of thing. He is going to push members of Congress for tighter regulations, so these financial institutions. It has been a very tough sell, Heidi, and members of Congress, they have not had the appetite to do such a thing.
That is going to be the strongest statement that he's going to make today. And he also wants to reassure American people at the same time, and this is the difficult part, that, eventually, the government is going to have a lesser role in the banking and the financial institutions, so they're not always going to -- taxpayers will not always be putting billions and billions and billions of dollars into the economy, as we have seen just over the last seven or eight months of his administration. And before his administration, in the burr administration, quite frankly.
Because there are a lot of people who feel uneasy about the government's role, that it has such a big role in running, whether it's a banks or auto companies.
COLLINS: Right.
MALVEAUX: All these kinds of things.
COLLINS: Yes.
MALVEAUX: So he's going to try to address those concerns as well.
COLLINS: OK. Very good. Still so much disagreement about whether or not the economy is really on the uptick anyway. So clearly that will be something that everybody's listening to.
Is he doing anything else while he's in New York, Suzanne?
MALVEAUX: We have learned this morning that he's going to be having lunch with former President Bill Clinton while he is here. The two leaders have been talking about -- they got together formally, about five weeks ago at the White House. That is when former President Bill Clinton talked about his trip to North Korea. Gave the president a briefing, if you will.
They were together once again at the memorial of Walter Cronkite. That was last Wednesday and the two have been talking about getting together the next time that the president is in town. They weren't able to do that last go around. They were able to spend a couple of hours, so they're going to spend some free time today to do just that.
COLLINS: Yes. I have to tell you, I was there and I saw them being pretty chummy together at the Cronkite memorial. Also saw the President Clinton last night at the U.S. Open, did a beautiful tribute to Arthur Ash. So it'll be interesting and we'll check with you about that meeting.
Thanks so much, Suzanne Malveaux this morning.
MALVEAUX: OK. Thanks, Heidi. COLLINS: We will have live coverage of President Obama's speech in a few hours from now. Our coverage begins at noon Eastern, so make sure you stick around for that.
Want to turn to health care reform now and what could be a make or break week on a compromise plan. The so-called Gang of Six, a bipartisan group from the Senate finance committee is meeting two hours from now.
The proposal that group is discussing has no public option or government-run plan, but does include these co-ops to compete with private insurers. Two influential senators, Democrat Kent Conrad of North Dakota and Republican Lindsey Graham of South Carolina, say a House health care bill is dead.
Conrad and Graham say any chance for a compromise overhaul lies in the bill the Gang of Six is studying. And in another sign the public option is endangered, one moderate Republican is rejecting a trigger mechanism.
(BEGIN VIDEO CLIP)
SEN. SUSAN COLLINS (R), MAINE: The problem with the trigger is it just delays the public option, because the people who are going to be making the determination about whether the market's competitive or not want the public option. So I think the trigger is just a delay.
(END VIDEO CLIP)
COLLINS: In his "60 Minutes" interview last night, President Obama says he is confident Congress will pass a good health care bill, despite some Republican efforts to kill reform.
To this story now. A Yale graduate student vanished days before her wedding. Now, a family's worst fears may have come true after a body is found on campus.
ROB MARCIANO, AMS METEOROLOGIST: I'm Rob Marciano in the CNN Severe Weather Center. A lot of rain over the weekend across a big stretch of Texas. A dramatic video and where is that rain headed next.
Weather is coming up when the CNN NEWSROOM comes right back.
(COMMERCIAL BREAK)
COLLINS: Shock and sadness this morning on the campus of Yale University as students are holding a candlelight vigil tonight. They're waiting to find out if a body found inside a wall on campus is missing classmate Anne Le. Police made the discovery yesterday on what would have been Le's wedding day.
Our Susan Candiotti takes a closer look now at the investigation.
(BEGIN VIDEOTAPE) SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (voice-over): It's now clear why no one had seen Anne Le leaving this medical research building last Tuesday. Apparently, she was trapped inside. Her body found Sunday night, hidden inside a basement wall.
ASST. CHIEF PETER REICHARD, NEW HAVEN POLICE: She hasn't been positively identified as of this time. However, we're assuming that it is her.
CANDIOTTI: The 24-year-old grad student often worked in a basement lab performing experiments. She was majoring in pharmacology. Le was last seen entering the building Tuesday, her image captured on security cameras. No one saw her coming out and investigators had been reviewing videos frame by frame and pouring over blueprints.
Then a law enforcement says they found blood stained clothes inside some ceiling tiles Saturday. The "New Haven Register" reports the clothes are different than the ones le was seen wearing on camera.
KIM MERTZ, FBI SPECIALIST AGENT: All I will say is that items that could potentially be evidence have been seized. None have yet been associated with Anne Le.
CANDIOTTI: Investigators also spent Sunday searching through a recycling plant in Hartford, about 40 miles away. They were looking through garbage hauled there from Yale. Police called it routine. The main focus is the building where Le was apparently murdered.
REICHARD: Detectives and investigators right now have a large amount of physical evidence at the scene that we're going through to determine if it's linked to this case or not.
CANDIOTTI: Yale's president reached out to the victim's family and sent an e-mail to the campus announcing Le's death.
RICHARD LEVIN, PRESIDENT, YALE UNIVERSITY: I met earlier this evening with Anne's family, with her fiance and his family and I conveyed to them all the deeply felt support of the entire Yale University community.
(END VIDEOTAPE)
CANDIOTTI: Students are planning a vigil on campus. Police are focusing on what happened, who did it, and why. Heidi?
COLLINS: All right, Suzanne, thank you.
A police investigation into the death of Christopher Kelly, a top fundraiser and trusted adviser of Rod Blagojevich, heats up. Medical examiners performed an autopsy on the body yesterday and they're looking to see if drugs found in Kelly's car contributed to his death.
Kelly was battling a series of legal problems including federal corruption charges surrounding the former Illinois governor. A weekend of flash flooding leads to several rescues in north Texas. Rising waters took two women in Forth Worth on a detour as they drove to church yesterday morning. Marie Reynolds says she turned a corner and her car was just swept away about 50 yards down a creek.
The water level rose waste high. Reynolds say she and her daughter were stranded for two hours before firefighters could get to them. She described what happened.
(BEGIN VIDEO CLIP)
MARIE REYNOLDS, RESCUED FROM FLOOD: Where was I? That's what I can't -- the car just -- I don't know, it just took me and then all of a sudden I spun and I don't know -- I just went down there and I hit that tree.
(END VIDEO CLIP)
COLLINS: Wow. Terrifying, I'm sure. Rob Marciano standing by now in the Severe Weather Center.
Boy, Rob, what is it, something like more than a foot of rain in Texas just since last week?
(WEATHER REPORT)
COLLINS: Yes, it does. All right. Very good. Rob, nice to see you. We'll check in with you a little bit later on.
MARCIANO: Sounds good.
COLLINS: It's been a while since we've heard from him. A new message reportedly from Osama bin Laden. What the terrorist mastermind is saying now.
(COMMERCIAL BREAK)
COLLINS: He's one of the reasons you can carry only small amounts of liquids on a plane, and now he'll spend the next 40 years in jail for a plot to bomb airplanes. Abdullah Ahmen Ali was the ringleader of the trio convicted last week for scheming to blow up planes with liquid explosives hidden in soft drink bottles.
All three were arrested back in 2006 and sentenced in London today. The judge sentenced his two accomplices to a little over 30 years a piece.
Phillip and Nancy Garrido set to appear in a California court this morning. The two are accused of kidnapping Jaycee Dugard when she was 11 years old. Today's hearing is a bail review. No bail has been set so far. The Garridos pleaded not guilty to nearly 30 felony counts. They allegedly held Dugard captive for 18 years. Authorities say Phillip Garrido fathered two children by Jaycee.
The president on Wall Street today, one day shy of the first anniversary of the Lehman Brothers collapse. He's expected to call for quicker action on financial reforms and steps to prevent another financial collapse. We will have live coverage of President Obama's speech just a few hours from now. Our coverage begins at noon Eastern.
And at 10:30 this morning, we're gathering the best of CNN Money Team to answer your questions about the economy, so if you have them, go ahead and go to my blog, CNN.com/heidi. Post your questions there, we'll get them straight to our money team and the answers, of course, too.
Remember this, during former President Bush's trip to Iraq in December, the family of the shoe thrower was expecting him to leave prison today, but a lawyer for Muntadhar al-Zeidi tells CNN a paperwork snag will keep them there until tomorrow.
The journalist said he was protesting the U.S. occupation of Iraq. He got a year in prison for it, but he is getting time off for good behavior.
Four suspected militants killed in what's believed to be a U.S. drone attack in Pakistan. A Pakistani intelligence source says happened in Waziristan. A number of others were hurt in the attack. The U.S. military does not comment on drone attacks in Pakistan, but it's the only force in the area with the known capability to conduct them.
In neighboring Afghanistan, now, four American troops died over the weekend in two separate bombing attacks.
Barbara Starr is joining us now live from the Pentagon with more on this, even as we hear of these recent deaths, Barbara, there's word the Pentagon could be sending more troops to the war zone, like 3,000. What are you hearing at this point?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Heidi, it looks now like defense secretary Robert Gates is making the plans ready to send several hundred, perhaps as many as 3,000 additional forces to Afghanistan to deal with the number one threat there, the IEDs, the roadside bombs, now the number one killer of U.S. troops in that war.
It is a very tough fight to find those bombs for U.S. forces. We have an extraordinary piece of video and audio to show you when army apache helicopters were flying overhead and came across some suspected insurgents digging in the ground.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: They've positioned themselves on the opposite side of the motorcycle from the friendlies that (INAUDIBLE) IED attacks and they're definitely digging in the road.
UNIDENTIFIED MALE: Is that a kid? Damn it! (EXPLETIVE DELETED)
UNIDENTIFIED MALE: The kid appears to be carrying something over into the vicinity. He's handing him something. And they're digging in that road.
UNIDENTIFIED MALE: OK. Go away, kid! Go away, kid! Go away, kid!
UNIDENTIFIED MALE: The child brought something to those two individuals that appear to be digging in the road. Handed it to them and moved off at this point.
UNIDENTIFIED MALE: Whoa! Never mind.
UNIDENTIFIED MALE: Break. Break. It just detonated by itself.
UNIDENTIFIED MALE: They just blew themselves up.
UNIDENTIFIED MALE: Confirmed. They just themselves up.
(END VIDEO CLIP)
STARR: Well, you see it there pretty clear. The insurgents blew themselves up, by all accounts. It's believed the child wandered off and was not injured in this situation. Just shows, fighting those IEDs, every day, a task in Afghanistan. And it is likely to be a big topic about 24 hours from now, Heidi, when Admiral Mike Mullen appears on Capitol Hill for reconfirmation as chairman of the Joint Chiefs of Staff.
That Senate hearing will get under way and it is expected tomorrow that it will turn in to, essentially, a referendum on the war and the very question about sending more troops. Heidi?
COLLINS: All right, understood. Barbara, keep us posted on that. Thanks so much, Barbara Starr, at the Pentagon this morning.
COLLINS: And just days after the eighth anniversary of the World Trade Center bombing, an audio message claimed to be from the man who planned them. In an audio take that has not surfaced online now, Osama bin Laden accuses President Obama of backing off his campaign pledge to end the war in Afghanistan.
The tape has not authenticated but plays over an undated photo of bin Laden. A recent picture of the terrorist leader has not been seen in the last two years.
Some people saw the financial crisis coming way in advance, but many were blissfully unaware until a major collapse one year ago made it impossible to ignore.
(COMMERCIAL BREAK)
ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.
COLLINS: It's a pretty big day on Wall Street today. In fact, in just a few hours, President Obama will deliver a major speech on the financial crisis. As we're listening to the opening bell now for this Monday morning, he will be delivering that speech from federal hall right here in New York. Our Susan Lisovicz is right across the street from that venue at the New York Stock Exchange with a look at the trading day.
Hi, there, Susan, what are we expecting?
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, we're certainly expecting a lot of excitement outside. I can feel it as I walked in, just about a half hour ago, Heidi, preparing for the president. Inside, well, we're seeing a lower open. Attention, of course, will be focused on what the president has to say.
We are expecting President Obama to call for support of his financial reforms and quick action. Things like expanded powers for the Federal Reserve, a consumer agency to take care of financial products or oversee financial products such as mortgages. Those are some of the things that the president may be looking into, specifically.
One year after the collapse of Lehman Brothers, the regulatory system still very much the same. And meanwhile, there are more banks that are on the list of failed institutions, hitting 92 this weekend after regional banks in Illinois, Minnesota, and Washington collapsed.
Also pressuring stocks today, a growing trade dispute between the U.S. and China. Asian markets fell sharply today on concern about unrest between the world's two biggest economies. Late Friday, the Obama administration raised tariffs on tires from China, saying those imports hurt American producers. The Chinese condemned the move calling it violation of global trade rules and indicated that it will retaliate with restrictions on U.S. exports of chickens and auto parts.
In the meantime, what we're seeing here, the three major averages are all down about half a percent. Remember, going into Friday, we had a five-day rally. And a year ago, Heidi, when traders returned to work after a weekend in which Lehman failed and Merrill Lynch was sold cheap to Bank of America, the Dow plunged 500 points. At the time, it was the biggest point drop since the markets reopened after 9/11.
So a lot has happened in the past year, and I'm sure the president will be talking about it in just a couple of hours.
COLLINS: Yes. How can you not?
All right. Susan Lisovicz, thanks so much. We'll check back in with you, and look at those numbers once again a little bit later.
Meanwhile, the roots of the financial crisis show it was a long time coming. But the dominos really didn't start to fall until about a year ago when Lehman Brothers collapsed. You saw the panic build on our air that day last September. Now, take a quick look back.
(BEGIN VIDEOTAPE)
JOHN ROBERTS, CNN ANCHOR: The financial markets taking a big hit overnight, following the fall of U.S. investment giant Lehman Brothers. Lehman will file for Chapter 11 bankruptcy protection today. The announcement coming after weekend efforts to rescue the 158-year-old investment bank fell apart. Bank of America tossed a financial lifeline to Merrill Lynch. The $50 billion deal said to be all but done, and another huge Wall Street firm is in trouble. AIG, the country's biggest insurer is seeking a government bailout.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Three of Wall Street's five independent brokerages are going to disappear. That means there are only two left -- Morgan Stanley and Goldman Sachs. A very different scenario for Wall Street.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: This is absolutely stunning. Wall Street has seen very, very few days like this. The mortgage crisis has now taken down two of the biggest names, the most storied names on Wall Street.
UNIDENTIFIED CNN REPORTER: And the financial turmoil in the U.S. today claiming two giants of finance, two Wall Street firms with more than two century's of history will soon be gone.
UNIDENTIFIED CNN REPORTER: You can say that this was, if you like, the worst-case scenario for many of them and their reaction as they arrived for work, or what was left of their work today, Monday, was frankly one of being stunned.
UNIDENTIFIED FEMALE: Basically, everybody is just finishing up. That's it.
UNIDENTIFIED REPORTER: Will you come back tomorrow?
UNIDENTIFIED FEMALE: No, no, that's it. That's it.
UNIDENTIFIED REPORTER: Do you know if you'll get paid?
UNIDENTIFIED FEMALE: We don't know. We don't know anything yet.
WOLF BLITZER, HOST, THE SITUATION ROOM: It's one punch in the gut after another for all of us who have money in the stock market, or in some of the nation's biggest investment banks, our retirement funds, all of this at risk right now. The breaking news just moments ago, as you saw, the Dow Jones Industrials closed down more than 450 points.
(END VIDEOTAPE)
COLLINS: Oh, kind of makes your hair stand up on your arms, doesn't it? Well, now, as you know, it is one year later, after a bank bailout, after an economic stimulus plan, what did the government do right and what still needs fixing?
Let's go ahead and welcome Peter Morici, live from Chicago this morning. He's a professor of International Business at the University of Maryland.
Go TARPs.
Peter, thanks so much for being with us once again. Hey, look --
PETER MORICI, PROFESSOR, INTERNATIONAL BUSINESS AT THE UNIVERSITY OF MARYLAND: Good morning.
COLLINS: When we go back to look at Lehman Brothers' collapsed, tell me right off the bat, what has the government done right here, and what have they done wrong? The big headlines.
MORICI: OK. Well, they've cleaned up the lending process to ordinary homeowners. We're getting away from these squirrelly mortgages that will never be repaid. But on Wall Street, they're back to their old tricks. They're writing complex financial instruments again. You know, these derivatives that don't make much sense and they're chasing big returns. We need to hear from the president today how he's going to tone down the risk taking on Wall Street so they don't put America at peril again.
COLLINS: So whose job was that or is that? Are we talking about Tim Geithner here, who should have said, you know what, you guys can't write like that anymore. Everybody has to understand what we're talking about, especially when you mention this idea of derivatives.
MORICI: Absolutely.
Tim Geithner really has to get in there and come up with a regulatory reform program that makes some sense. That's not really the Fed's job to regulate these banks. He was president of the New York Federal Reserve when this was coming down, so he's hardly new to the job. And yet, we've not heard from him, a program that people are willing to embrace and have confidence in. He's tabled two reform programs already, and neither has generated a lot of fire and interest.
COLLINS: What about taking the toxic assets off of the books as well? I mean, I remember very clearly that was a huge issue in all of this credit flow.
MORICI: Well, when he came in to the Treasury secretary, he had the money to do it in the TARPs, and he hasn't been able to get that going. We've had 91 regional banks bail, another 400 on the watch list largely because he hasn't gotten that program going and operational.
COLLINS: Yes, 92 banks on the failed list for now, too, as well. Any problems that you see on the horizon that could actually stop some of the economic recovery that we have seen, some of the green shoots, if you will, that people have labeled them?
MORICI: Well, as you know, the regional banks have a lot of foreclosures on their books, a lot of commercial loans that are failing. And they're unable to borrow through Wall Street, like they once were able to do, because Wall Street doesn't see it as profitable. So a lot of small and medium-sized businesses aren't able to borrow money, even when the good, solid, healthy businesses going to good, solid, healthy banks. There's just not enough cash there.
COLLINS: Yes, absolutely.
What about unemployment? I mean, how does all of this fit in? I'm trying to think about the people at home who are watching today and trying to understand exactly what they have gotten in the last year by way of, you know, any improvement.
MORICI: Well, the banks have gotten a lot of help, but unemployment is going to continue to rise, simply because we're getting an economic recovery, because of trouble with the banks, and some other problems we have in other sectors. And the import side are keeping us from growing at a robust three percent or four percent rate in recovery. We're likely to grow, except for maybe one quarter, at about 2.5 percent. And that's not enough to bring unemployment down, simply because we have productivity growth and we have new folks entering the labor force. New high school graduates every year.
COLLINS: Sure. Sure. Absolutely.
And then people who are a little bit older are still staying in, because so uncertain about their personal finances at this point.
Did the stimulus package hurt or help?
MORICI: Well, it hasn't done much at all. The most money that's been spent so far has been in the form of tax cuts for people, ordinary folks, and they've saved most of that money. So it hasn't been spent. In terms of the infrastructure spending, the spending at state and local levels the federal government has promised, President Obama hasn't been able to get that money out there. I don't know that it is his fault.
Over the years, Congress has made it very difficult for the federal bureaucracy to move quickly. We have so many checks and balances. They spend most of their time checking and balancing. Look at the clunker program. A ten-page form to just get the rebate on one car.
COLLINS: Yes. Yes, yes, very good. And people still wondering about the money regarding all of that as well.
So mix review I think in the end.
Peter Morici, we sure do appreciate your time this morning. International business professor at the University of Maryland from Chicago.
Thanks, Peter.
As you know, it's a year since your 401(k) tanked, most likely, anyway. So what have we learned, and then how can you protect your retirement savings at this point?
(COMMERCIAL BREAK)
COLLINS: Here's a check of our top stories now. A vaccine for swine flu may be available earlier than we were expecting. Health and Human Services secretary Kathleen Sebelius tells ABC News some vaccine could be ready in three weeks.
(BEGIN VIDEO CLIP)
KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: We are on track to have an ample supply rolling by the middle of October, but we may have some early vaccine as early as the first full week in October. We'll get the vaccine out the door as fast as it rolls out the production line.
(END VIDEO CLIP)
COLLINS: Jury selection begins today in the first trial over FEMA trailer fumes. A New Orleans woman and her son have filed suit against trailer maker Gulf Stream Coach. The suit contends the plaintiffs were exposed to potentially dangerous fumes while living in the government-issued trailers. A ruling came down last month that the statute of limitations bars claims against the government, but lawyers say they plan to appeal that.
Rapper Kanye West is the talk of MTV's Video Music Awards show last night. West interrupted country star Taylor Swift during her speech accepting the award for Best Female Video. West thought Beyonce should have won.
Take a look for yourself.
(BEGIN VIDEO CLIP)
KANYE WEST, SINGER: Yo, Taylor, I'm really happy for you. I'm going to let you finish, but Beyonce had one of the best videos of all time!
(END VIDEO CLIP)
COLLINS: Unbelievable.
Beyonce later won the Video of the Year Award and invited Swift on stage to finish her interrupted speech.
Good for her.
West later apologized on his blog to Taylor Swift for his behavior.
The financial crisis, one year in. CNN correspondents around the world give their view of the recovery efforts.
Give us two minutes, we'll take you across the globe.
(COMMERCIAL BREAK)
COLLINS: One year ago today, the iconic investment bank, Lehman Brothers, collapsed, and around the world, the financial crisis got much, much worse.
We want to tap in to CNN's extraordinary resources now and get the view from financial centers across the globe. Our correspondents weigh in.
MORGAN NEILL, CNN HAVANA BUREAU CHIEF AND CORRESPONDENT: I'm Morgan Neill in Tokyo. Now what's changed here in the year since the Lehman collapse? One of the hardest hit areas has been real estate. And you can see it here all around me. A year ago, this area was filled with scores of projects under development. But after the Lehman collapse, apartment sales plummeted and the over-supply of rooms led to dozens of companies going bankrupt, and that meant many projects like this one behind me came to a grinding halt.
EUNICE YOON, CNN INTERNATIONAL CORRESPONDENT: I'm Eunice Yoon in Hong Kong. One year after the collapse of Lehman Brothers, many people here still don't trust the banks. Hong Kong investors had put hundreds of millions of dollars into Lehman-backed assets, and they're still fighting to get their money back.
The bankruptcy of Lehman Brothers has hurt the reputation of Wall Street. U.S. assets were considered some of the safest bets, but now investors are shifting their focus to China and other emerging markets because they think that's where the money is.
EMILY CHANG, CNN INTERNATIONAL CORRESPONDENT: I'm Emily Chang on Beijing's Wall Street. This is where most of the international financial institutions are located like Goldman Sachs, JPMorgan, and Citigroup. Since Lehman Brothers collapsed, many people working for these big banks here in China have lost their jobs or been transferred back to their home countries.
But the Chinese government has taken unprecedented steps to protect China's economy in the financial crisis. A massive stimulus package has been relatively successful. And China's GDP has continued to grow thanks to hefty government investment. But unemployment remains a top concern, especially among migrant workers and recent college graduates. Exports and imports continue to fall, and China's export-driven economic model has largely failed.
COLLINS: The collapse of Lehman Brothers one year ago ignited financial shock waves that caused your 401(k) to crumble.
CNN's personal finance editor, Gerri Willis, joining us now.
So, Gerri -- boy, a lot of people were just panicked as they saw the stock market plummet. Everybody talking about how, you know, I don't even want to look at my 401(k), and what it's worth anymore.
What have we learned about our 401(k)s since then?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Absolutely. Well, you know, I think the big message here is that investing is a long- term proposition, not a short one. I want to show you some numbers here. If you actually look at 401(k) balances, this isn't just market balances, but actually the kinds of money that people were losing in 2008. Average balance down 28.3 percent, but look what happened the following year, we're up 12 percent.
I think what gets lost is what's happened in the recovery, the rebound. There's been a turnaround in the market. Now I have to say, only 11 percent of employees broke even in '08.
COLLINS: Yes.
WILLIS: But there has been a change of tone in the market, and that's something people should be paying attention to.
COLLINS: Yes. And we talk about unemployment. All the people who don't have the 401(k) to be looking at at all anymore.
WILLIS: Well, that's a totally different problem. Absolutely.
COLLINS: Yes, of course.
WILLIS: And a big one.
COLLINS: What are some of the other takeaways, though, from all of this.
WILLIS: Well, you know, I think the thing that was most disconcerting to people is it seem like there was no safe haven. No investing category could do well. Take a look at these numbers.
First of all, domestic stock funds. These are U.S. stock funds down 39 percent in '08. International stock funds, even worse, down 46 percent. Bond funds, a place you'd expect to be safe, no way, down eight percent. But, again, there's been a turnaround.
If you could stay in the market, if you could sweat it out, if you could stay calm and keep your money working for you, since the market bottomed, let's look at those funds again. What have they done? Large cap stock funds, up 55.8 percent. International stock funds, up 72.5 percent. Bond funds up as well.
What you see here is that if you can stick to your guns, if you can have some patience, you know, a turnaround can come and help bail you out. But you have to the right asset allocation to begin with.
COLLINS: Yes. And I remember very well, certainly you and many of our financial advisers were saying just that back when all of this was happening. You've got to wait it out. You've got to -- this is not the time to take everything out. Although, I think a lot of people did take it out and put it into the bonds, because, you know, you look at the percentages there, and at least it was the lesser of the three evils that we should --
WILLIS: But then you lock in your losses on stocks.
COLLINS: Yes, of course.
WILLIS: That's the problem with that strategy is you end up losing money in stocks.
Heidi?
COLLINS: Yes, no question.
All right. Gerri Willis, nice to see you one year later.
WILLIS: Nice to see you.
COLLINS: Even though I've seen you a lot in between.
Thanks so much. Appreciate it.
WILLIS: My pleasure.
COLLINS: At 10:30 this morning, we are gathering the best of CNN's money team to answer your questions now about the economy. Make sure you go to my blog, CNN.com/Heidi. Put your questions there, and we'll get them answered for you.
What happens after the guests leave the tea party? The cross- country conservative bus tour ends with a march on Washington. But does this movement have legs now?
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COLLINS: All right.
A whole lot of rain to be talking about in Texas right now.
Rob Marciano joining us from the severe weather center.
Like you were saying before, initially this was a good thing, but now it's just way too much.
(WEATHER REPORT)
COLLINS: An awful lot going on this morning. And our CNN crews are bringing it to you.
Let's check in with them beginning with Christine Romans in New York.
ROMANS: Heidi, what has changed in the past year? What have been the successes and the failures of this administration, the administration before it to try to stem the fallout from the Lehman Brothers collapse? I'll tell you in just a few minutes.
LISOVICZ: I'm Susan Lisovicz at the New York Stock Exchange, where markets are dropping but not nearly as much as they did a year ago when the fourth largest investment bank had been allowed to fail. We'll be talking about the lessons of Lehman and some of the changes over the past year.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: I'm Elizabeth Cohen in Atlanta. Swine flu shots may be more plentiful, and out earlier than expected. But the question is, do you want one?
I'll have that at the top of the hour.
COLLINS: Yes, good question.
All right, ladies, thanks so much. We'll chat with you again shortly.
Also, remember to join me at 10:30, because CNN's money team is going to be talking about the economy, answering some of your questions. So make sure you take a moment to go to my blog, CNN.com/heidi and put your questions there.
(COMMERCIAL BREAK)
COLLINS: The Tea Party Express made its final stop a big one. Tens of thousands of people gathered at the Capitol Saturday. They were protesting health care reform, higher taxes and what they see as government spending gone wild. But will the movement carry on past Saturday's rally?
CNN's Kate Bolduan reports.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: President Obama, can you hear us now?
BOLDUAN: A swarm of protestors from across the country descended on Washington this weekend, loud and frustrated they railed against big government and the Obama administration.
UNIDENTIFIED MALE: We do not want government involvement in our health care, nor do we want the higher taxation that comes along with such a proposal.
UNIDENTIFIED MALE: I'm just sick and tired of government growing and spending and taxing everybody into oblivion.
BOLDUAN: The event, a culmination of the anti-tax rallies of spring and the health care protests of summer, organized by conservative groups like Freedom Works, which is led by former House Majority Leader Dick Armey.
DICK ARMEY (R), FORMER HOUSE MAJORITY LEADER: What did they say about, they weren't real. They're Astroturf. They don't know what they're talking about. They'll go away. Well, did you go away or are you back?
BOLDUAN: But now that the march on Washington is over, where will they go next?
DEBORAH JOHNS, VICE CHAIR, TEA PARTY EXPRESS: Stop the bailout, stop the debt, stop the tax and spending.
BOLDUAN: Deborah Johns who road the Tea Party Express from California to Washington insists this grassroots movement has staying power. (on camera): This place was a mass of people. They're now gone. It kind of emblematic of my question, which is where do you go from here, then?
JOHNS: You know what, at all of our stops, we encourage everybody in all those cities to stay involved in your local politics, at your local and state level.
BOLDUAN (voice-over): All with a keen eye toward the 2010 mid- term elections and beyond.
JOHNS: We want to start early. We want to keep the focus going, and we want the people to know that, you know what? Your voice does count.
BOLDUAN (on camera): From here, the challenge is trying to keep up momentum. Organizers say the focus will remain on local action, but also say we can expect another nationwide rally in November marking what they call the start of the countdown to congressional elections.
Kate Bolduan, CNN, Washington.
(END VIDEOTAPE)
