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Recounting the Lehman Brothers Collapse, Body Found Inside Wall of Yale Lab, Obama Set To Speak

Aired September 14, 2009 - 10:59   ET

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


TONY HARRIS, CNN ANCHOR: And good morning, everyone, it is Monday September 14th. Here are the top stories for you in the CNN NEWSROOM. We mark one year since the collapse of Lehman Brothers and the onset of the financial meltdown. President Obama on Wall Street today pushing for change.

Senators who may hold the keys to any health care overhaul meeting again this hour. We watch for progress on a bill.

And six months into the government's mortgage modification program, CNN iReporter describe the frustrating runaround they're getting from big banks. Good morning, everyone. I'm Tony Harris and you are in the CNN NEWSROOM.

So, let's quickly get you caught up on the day's hot headlines, then take time to break down the big issues to explain why they really matter.

Leading the way this hour, President Obama focusing on how to protect your money by preventing another financial collapse, his speech on Wall Street. Next hour marks the anniversary of the collapse of Lehman Brothers which triggered the global money meltdown. The president will note the economy has improved, he will call for stricter oversight to safeguard against future financial implosions and he will discuss an exit strategy for government involvement in the financial sector.

CNN's Money Team joins me live in just a couple of minutes. You can watch the president's speech live at 12:10 Eastern, that is 9:10 Pacific Time.

Health care reform also center stage this hour, the so-called gang of six, three Democratic Senators and three Republicans just now starting another meeting on the template for a reform. The meeting and the offices of Senator Max Baucus they are said to be close to a deal.

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD, (D) NORTH DAKOTA: We think we're very close to an agreement, and I want to repeat the agreement that we have the Congressional Budget Office has told us, is fully paid for, bends the cost curve in right way and does extend coverage to 94 percent of the people.

(END VIDEO CLIP)

HARRIS: Our congressional correspondent is outside Senator Baucus' offices and we will go live to her in ten minutes.

Police are investigating the death of Christopher Kelly a close aide and fund-raiser for former Illinois Governor Rod Blagojevich. An Illinois official says drugs were found in Kelly's SUV and the investigation is being treated as a possible suicide. Kelly was set to report to prison this week, after pleading guilty to tax fraud. He was also facing charges in the Illinois Senate seat scandal involving Blagojevich.

(BEGIN VIDEO CLIP)

ROD BLAGOJEVICH, FORMER ILLINOIS GOVERNOR: I don't know any more than you know except that a friend of mine took his life because he refused to submit to the pressure by the government to lie about me and to think that it has come to something like that begs a lot of questions.

(END VIDEO CLIP)

HARRIS: Eight years after the 9/11 terror attacks there is another audio message reportedly from Osama Bin Laden. We will break it down with CNN's senior editor by Mideast affairs Octavia Nasser.

Yale University will hold a vigil today for missing student Annie Le after the woman's body was found stuffed inside the wall of the school laboratory. The gruesome discovery made yesterday, the day Le was set to get married.

(END VIDEO CLIP)

ASST. CHIEF PETER RECHARD, NEW HAVEN POLICE: She hasn't been positively identified as of this time; we're assuming that it is her, so we're treating it as a homicide.

(END VIDEO CLIP)

HARRIS: That's our look at the day's big stories. Now, let's go in depth. A year ago today, Lehman Brothers collapsed and the world hit the panic button. The American economy tested and stressed like it hadn't been since the Great Depression. What happened on Wall Street had an impact on your street, whether you work at an office, on a farm, whether you attend school or are retired; it all comes down to your financial security. How do we make sure what happened last year doesn't happen again?

President Obama on Wall Street today pressing Congress to take a firmer hand with the financial industry, the address live next hour. So let's do this. Let's set the stage with the CNN money team, such a dependable presence in the newsroom during the crises. CNN's Ali Velshi and Christine Romans and Ali, just this day only, because normally we're going to start with Christine, but let's start with you, this feels a little bit like a then and now day.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Sure.

HARRIS: As we talk about the financial sector meltdown. And in the same breath, we're talking about this meltdown in the same breath as we talk about the great depression.

VELSHI: Yeah.

HARRIS: So how did it happen?

VELSHI: All right. There are a couple of things that led this to happen. The first one, is this is only recession that was triggered by housing. So housing prices have been going up, we were borrowing more because interest rates were low, lending standards were very low, so people were buying houses who shouldn't have been and they started defaulting on those. As a result of the extra money there was a growth in what we call debt financing for businesses instead of businesses raising money in terms of equity, people buying a share of the business, they were just borrowing money because there was lots of it out there and it was cheap.

Everybody was dependent upon that homeowner being able to make their payments. When that homeowner stopped making their payments because home prices came down or their interest rate adjusted it had this domino effect all the way up the chain and it affected some of the biggest companies in the world. Now we have been talking about the sub prime crises all the way up to September of 2008 but on this day, a year ago, it went from being a sub prime crisis to being a very, very serious credit crisis, which led us into the serious recession.

HARRIS: Ali, this was not -- I contend this was not bottom up. This was top-down. The banks, the financial institutions, said oh, oh, there's a new way for us to make oodles of dollars and that is when they made available these loans to people who could not afford them.

VELSHI: Sure. You know, Christine will probably chime in on this one. The fact is you're right, I always maintained that while many borrowers were not entirely responsible about their financial situation and what they could afford, borrowers typically do this once every several years, they go for a mortgage. The mortgage brokers, the banks, the valuation people, they do this every single day. Someone needed to step in. So did the government and hopefully we're going to hear about that at noon.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I would say Congress, look, you had the big banking committees and anything related to the consumer, they were pushing for record home ownership, they said this was the way to the American dream for so many people and in normal restrained times, yes it is. But you had the enthusiastic approval of just about anybody who had their hands in the economy saying go, go, go get people into homes and the whole thing turned out to be --

HARRIS: So, Ali that's the then. Let's talk about now. Christine, what has really changed in the years since the collapse of Lehman Brothers to make sure this doesn't happen again?

ROMANS: Well, everything has changed in that the government has massively intervening in the lender of last resort, there insurer of last resort, they make our cars, began to guaranteeing your home loan. The government involved in the economy like something we've never seen in our lifetimes. When you look on Wall Street, they're still trying to hash this out. The president and his team, Timothy Geithner and such, they are still trying to push through reforms. How do we deal with too big to fail?

A noted economist said this morning, look the too big to fail, that's worse today than it was before we had this crises, role of regulators. You still have this patchwork of regulators. You still have risk taking linked with pay on Wall Street. And this all stuff, you know, June the Treasury Department laid out what it would like to see done, including the big consumer protection agency that wow the big business has spent a lot of money fighting the idea of a consumer protection agency.

So the president is going to use this moment today right down there at Federal Hall where the beginning of our country they were fighting about how much the government was going to be involved in the economy. He's going to be at that very place trying to make this pitch that we need to fix this now while the history is still fresh before we move on and let it happen again.

HARRIS: Also, Christine, thank you. Ali, thank you. You guys are back with me next hour.

I got to tell you, there is more on the financial meltdown and the president's speech coming at the half hour. I will speak with Ryan Mac, a financial planner and our Susan Lisovicz, a longtime Wall Street watcher. You can see President Obama's address from Federal Hall on Wall Street live next hour, 12:10 Eastern Time, CNN Thursday a year after the collapse of Lehman Brothers and the worldwide economic collapse.

Anderson Cooper and Ali Velshi look at whether the bailout worked and explore how the country's moving forward a CNN Money Summit Special, "Money & Main Street" Thursday night at 11:00 Eastern only on CNN.

And right now, the so-called gang of six is meeting on Capitol Hill, trying to define the Senate's health care reform bill. We will take you there live.

Now let's take you to Wall Street for a look at the big board. As you can see, the Dow down 12 points. We will be following these numbers throughout the day for you right here in the CNN NEWSROOM. We are back in a moment.

(COMMERCIAL BREAK)

ROB MARCIANIO, AMS METEOROLOGIST: Talk about too much of a good thing, especially in northern Texas around Dallas area. These women had to be rescued a lot of swift water rescue teams out in full force yesterday and Saturday with heavy rains falling across not only Dallas and Ft. Worth and Arlington, but also across parts of Austin and San Antonio where they desperately need it. Good job, guys, getting ladies out of water. 5.8 inches of rainfall yesterday in Dallas, Arlington, five. This doesn't include what happened Friday and Saturday. So certainly a dousing again, San Antonio, Houston, Corpus Christi they all need it but they still got flooding.

Very slow area of low pressure not really moving but it is certainly pin wheeling moisture back in to the Dallas area. Looks like Louisiana, Arkansas, pushing eventually into parts of Mississippi with this particular system. As far as daytime highs today, check them out, 80 degrees in New York City. Finally some dry weather to finish up the U.S. Open there, 86 degrees in D.C. so these temperatures certainly are well above normal.

As far as what's go on out west, delays at the San Francisco Airport. But the fog and low clouds beginning to lift, gorgeous shot of the Bay area. KGO, thanks for that. Temps in the low 60s there, if you are doing some travel by airplane, still some delays at SFO, JFK and Houston and LaGuardia. That's the latest from the Weather Center, the CNN NEWSROOM with Tony Harris is coming right back.

(COMMERCIAL BREAK)

HARRIS: All right. Let's see here. Details of a possible compromise on health care reform coming out. The so-called gang of six meeting right now in the offices of Democratic Senator Max Baucus. Among the key points a proposal for 35 percent tax on insurers for those so-called Cadillac plans. It would kick in for any insurance plans costing more than $8,000 for individual coverage. And the $21,000 for family coverage. Thresholds would be higher in the 17 highest cost states for the first three years. Drill down on that a little bit more. Live to our senior congressional correspondent, Dana Bash outside the senator's office. And Dana are we still expecting a bill by Wednesday?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Wednesday or Thursday, that's right. You mentioned one of the many things that the group of Senators who are meeting behind me right now have actually agreed on. But you know, the drama has been high. It probably couldn't get higher than it is right now here because, Tony, as you know, we've been talking about this for months; we have been standing here for months.

This meeting that they're in right now could be the first of perhaps some of their final meeting in determining whether or not these bipartisan talks will see fruition, specifically whether or not the three Republicans Senators in the room right now with three Democratic Senators will stay negotiating whether they can cut a deal or whether they're going to walk. They are working on the final very important sticking points in this huge, huge health care proposal that they have been working towards.

I'll tell you just a couple of things that they're talking about behind me. Right now one of the big things is Medicaid expansion. Part of the way that they are trying to expand health coverage is through the Medicaid program. One of the things that many people, including one Republican, Olympia Snow in there has questions about, is how that going to be paid for? She and others are very worried that the burden will be on the state. They'll probably have a conference call with governors to discuss that. The other thorny issue we've known illegal immigration. And many of the Republicans and some of the Democrats really want to make sure illegal immigrants would be banned from having health care through any of these proposals. But how is that really verified? Those are some of the things they are talking about.

And lastly, abortion. That is something that we haven't talked a lot about but it is certainly being talked about in there and the question is, how do they make sure that no federal dollars through any of these programs go to pay for abortions in this health insurance program? Gives you a sense of the controversy sticking points they are talking about in there now.

HARRIS: Do you expect the Senators to come out as they have most days around the noon hour to give us an update where things are?

BASH: Probably. These sessions tend to last an hour, hour and a half but I've got to tell you because we're down to the wire, they could stay in there longer today. We'll see. There was some talk last week whether or not this would potentially be the final meeting. Talked to a couple of Republican sources who say they're not ready to say do or die yet if you will on these talks but it's getting close.

HARRIS: All right. When we talk this hour, let's talk about how this is beginning essentially the template for health care reform. For get what you've seen on the house side so far, this is essentially the framework that's being worked out right now correct?

BASH: It sure is.

HARRIS: Let's talk about that.

BASH: The house is waiting for a report out of here. That basically answers your question right there.

HARRIS: Our senior congressional correspondent Dana Bash for us. Dana appreciate it.

BASH: Thank you.

HARRIS: You know it's been a year since Lehman Brothers failed, and the bailout era began. How is your 401(k)? Personal finance editor Gerri Willis joins me next in THE NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: A quick check of top stories now. A retired state trooper in Missouri helps capture a suspected serial bank robber Chad Schaffner, the extrooper says he had a suspicious feeling about a man he saw at a hotel. He looked up the license plate on the "America's Most Wanted" website.

Remember the Iraqi man who threw a shoe at President Bush last December? We're going to show it to you a few times. His lawyer tells CNN he is being released from a Baghdad jail Tuesday, three months early for good behavior. Dancing in sync with her brother on the big screen behind her. That's her song "Scream." Janet Jackson paid tribute to Michael Jackson last night at MTV Musical Award. Madonna opened the show calling Jackson one of the greatest talents the world has ever known.

The financial panic that began a year ago today burned nearly everybody and anybody with a retirement plan. Let's talk to personal finance editor Gerri Willis. Gerri, look, a year ago, the Dow was above 11,000, little did we know it would fall, what, almost 5,000 points. Gerri, what have we learned?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: I'll tell you, what we've learned the main lesson is that investing isn't a short-term proposition. You've got to be in for the long haul. I want to show you some numbers, average balances in 401(k). This is money we have set aside for retirement. Last year that number fell 28 percent. Falling to $50,200, which is not enough to retire on obviously, people are still building those accounts.

This year that number up 12 percent. So we've seen some kind of gain. The takeaway here is that if you had cashed in that balance at the end of last year, just depressed over what was happening in the markets you would have gotten a huge loss, a very big loss, indeed. You would have locked in those losses by staying put at least you see some gains and you have to think over time will probably see more.

HARRIS: Yeah. And you were on that from the very beginning. You don't lock in your losses here. Try to ride this thing out. Difficult for folks who needed the money and were coming close to needing that money. Gerri what are some of the other takeaways?

WILLIS: Well look, it felt like there was no safe harbor, every asset class got creamed. Lets take a look at how some of the fund groups performed over time. Let's look at, for example, stock funds, domestic stock funds, mutual funds down 39 percent, as you can see here. International stock funds down 46 percent. They tend to be a little more volatile. Finally, bond funds a place you would expect to be a safe haven here down 8 percent as well. And that meant there was nowhere to run, nowhere to hide. But I want to show you some good news here.

HARRIS: OK.

WILLIS: Looking at numbers here, from the bottom to now, OK? Since the market bottomed on March 9th, large cap stock funds are up almost 56 percent, international funds up 73 percent.

HARRIS: Boy.

WILLIS: Bond funds up 14 percent. I'm rounding here. But you get the point.

HARRIS: Yeah.

WILLIS: These things are volatile, they move, they move quickly. To do well to actually see some of the gains, you have to be in them. I think really, Tony, one of the big lessons for people who are at the cusp of retirement, very close to it, you have to make sure you have the right allocation going in because you can't stand to take a 30, 40, 50 percent loss as we saw so many people taking who are right on the cusp of retirement or in it. You have to be very careful as you approach those retirement years because lets face it that is the nest egg you're going to be living on.

HARRIS: Very good. Thank you. Thanks, Gerri.

WILLIS: My pleasure.

HARRIS: We are less than an hour away from President Obama's speech on Wall Street. We will look at the lessons of Lehman Brothers next on THE NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: It has been a year now since the financial industry started its tailspin and President Obama marking the anniversary of the collapse of Lehman Brothers to make his case for reform. He is speaking less than an hour from now on Wall Street. Let's go live now to New York and our White House correspondent Suzanne Malveaux. Suzanne, what are we likely to hear in the next 40 minutes or so, give or take? I think I heard a bit of a preview in the "60 Minutes" interview last night.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: You certainly did, Tony. What the president is going to do, he is going to defend his administration's actions, he's going to say that the $787 billion economic stimulus package has done some good, that they've stepped away from the brink, if you will that there's not the great depression that many people had feared.

He is also going to say as well that there is more that needs to be done but that he's going to put it in context, he is going to talk about what he inherited from the Bush administration and essentially what he's responsible for on his own watch. And having said that he's going to hold Congress accountable. He's been asking them, pushing them, essentially for legislation that would get tougher regulations for these financial institutions. That has not happened, Tony. Members of Congress have very little appetite for that so far. A huge lobbying effort against it. That's going to be a very tough sell.

Finally, there's another audience here that he is aiming this message to, that's the American people. He's got to simply tell them what's the exit strategy here? Are taxpayers going to be spending billions of billions of dollars to bail out financial institutions, auto companies, things like this, for years and years to come? He's going to say no there's a limit the commitment when it comes to this, everybody's got to be accountable, and everybody's got to take responsibility. These are just some of the highlights Tony that he's going to talk about. I want to play a segment from "60 Minutes" to give you a sense of where he's going with all of this. Take a listen.

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: When I walked in, the banking system, the financial system, was under the verge of collapse. And what have I don't? I've essentially taken the program that was voted on by the previous Congress, supported by the previous Republican president, and we've made it work.

(END VIDEO CLIP)

MALVEAUX: So, Tony, that really is going to the whole thing about there are Bush administration policies, as well as the mess that he's inherited and in some ways he has embraced some of those Bush administration policies, tried to make them work, put his own stamp, his own brand on it, if you will. But there -- there's some folks that really feel uneasy about the government's role in all of this. So they're going to be looking for some reassurances, if you will.

HARRIS: And if you would Suzanne, tell us about this power lunch, after the speech today.

MALVEAUX: I guess you could call it a power lunch. You have the president as well as a former president, Bill Clinton, they are going to be sitting down, and they are going to be eating together. This is something that they've been talking about doing for quite some time. They formally got together at the White House about five week ago, so that President Clinton could give him a debrief on his North Korea trip.

They saw each other last Wednesday at the memorial of Walter Cronkite, very friendly, warm exchange between the two. They said they wanted to get together for lunch then but President Obama had to do that speech as you know to Congress. So they're going to sit down today and make it work. We'll see.

HARRIS: We'll see.

MALVEAUX: No food fights. We think it's going to be good.

HARRIS: Suzanne Malveaux, traveling with the president in New York. Thank you.

The collapse of Lehman Brothers caused financial crises that really circled the globe. Now one year later we look at what lessons have been learned. Our Susan Lisovicz has more.

(BEGIN VIDEO CLIP)

SUSAN LISOVICZ, CNN CORRESPONDENT: The exotic instruments that brought about the biggest bankruptcy in U.S. history are still hard to grasp. But the economic destruction caused by the collapse of Lehman Brothers is not.

BERNIE MCSHERRY, SENIOR VP: There was definitely panic in the air. I was here on the trading floor just behind us here 1987 during the crash and that was bad, but this was much worse. This was a feeling that the system itself was coming unglued and that perhaps when the morning -- the next morning came up, we might not have ATM cards that worked.

LISCOVICZ: Lehman failed in an economy already reeling from the government's arranged marriage of Bear Stearns and its seizure of Fannie Mae and Freddie Mac. Some financial experts say it was ultimately the government's inconsistent response to failing companies and then its warning of a financial Armageddon without passage of an emergency stimulus that triggered the panic in worldwide financial markets.

BILL ISAAC, FORMER CHAIRMAN, FDIC: The government really needs to communicate when you're in the middle of a crisis that you're in charge, you know what you're doing, and here are the rules, here's what we're going to do calm this situation down. And we didn't do that.

LISOVICZ: Lawrence McDonald worked at Lehman and wrote a book about it. He says the lesson of Lehman begins at company itself. He says Lehman wasn't too big to fail, it was too big to succeed.

LAWRENCE MCDONALD, AUTHOR, "A COLOSSAL FAILURE OF COMMON SENSE": It's just too big to be managed. In essence, it's the same group of people that were running a $38 billion institution in 1998, the same group is -- just fast forward to 2007 is running $780 billion worth of risk.

LISOVICZ: But risk isn't as much of a threat to the economy anymore. Rather, it's the almost complete lack of risk. A credit crunch that is yet another legacy of Lehman. One year after its devastating collapse.

(END VIDEOTAPE)

LISOVICZ: And then there are foreclosures of record levels and the unemployment rate is expected to continue to climb. But, Tony, you also can't ignore some of the improvements over the past year.

First of all, there is a growing sense that the worst is over, there is no more panic in financial markets, and consumer sentiment has improved. And because of that, there's perhaps less urgency to tackle overhaul the financial system which would be a Herculean task under any circumstance but one that will be helpful in the next bubble.

And Tony, sure as the sun will come up tomorrow, there will be another bubble.

HARRIS: Exactly. Susan, it has to happen. The reform has to happen. If you would, stay with us.

LISOVICZ: Sure.

HARRIS: I want to bring you into the discussion with financial planner and Barack Obama supporter, Ryan Mack. He is president of Optimum Capital Management in New Jersey.

Ryan, good to see you. Thanks for the time. RYAN MACH, OPTIMUM CAPITAL MANAGEMENT: Thank you for having me.

HARRIS: All right. So, Ryan, first, and then Susan. Look, the markets failed. Regulators failed us. And as a result, the American people got hosed here. Can we all agree on that? And then I'm going to ask the question, can we agree on that point?

MACK: I can definitely agree on that point.

HARRIS: OK. So the people who failed us, the big banks, AIG, the investment houses needed a bailout from us and are now heaping fees on us to attempt to grow out of the crisis.

So, Ryan, first, and then Susan, what does Wall Street need to do to restore main street faith in the financial sector?

MACK: Well, the first thing they have to do is fix the problem that caused it in the first place. I mean, you know, Barack Obama, trying to pass health care legislation does not have as much political capital to maybe do certain things like trying to make -- force the banks to shrink in size or try to force them to make a more simplistic capital structure but he can force them to say that we want to make sure we can see transparency of assets.

We can make sure that at the end of the day, we can make sure that at the end of the day we can force more consumer protection laws and protecting that consumer. We can force you to make sure that we can lay a more effective and more regulated groundwork so that we are not having these highly unregulated credit default swap type investments...

HARRIS: Yes.

MACK: ... that caused the problem in the first place. All of these things that caused the problem have not been fixed yet, and I'm hoping that we can put some time -- there's been a lot of talk, but no timelines on getting this done just aggressively as we tried to push health care through.

HARRIS: Susan?

LISOVICZ: Well, I mean, when you have a crisis like this, I mean, you can do a lot of finger pointing, I think, Tony and Ryan. We can all agree on that, whether it's Washington allowing some of these institutions to get as big as they were. Consumers taking on too much risk, the borrowing standards which went out the window. The exotic instruments and so on.

I think one thing that we can talk about a little bit is you can see these bubbles forming.

HARRIS: Yes.

LISOVICZ: We talked about it in the dot-com era.

HARRIS: Yes. LISOVICZ: You know, companies that had no earnings and they were trading at, you know, these lofty, incredible highs we knew that it was happening in the housing market, we knew people were getting free money. So I guess the question is, is perhaps should regulators step in earlier? Because you've seen, we have seen what's happened in the past 10 years, it's been devastating.

HARRIS: Yes, but now we're in a bit of reform climate right now, OK? And maybe part of what you're saying is that we don't seem to learn our lessons, Susan. But in this reform climate, look, Ryan, will there be, for example, regulation of these derivatives?

I still don't know what the heck a derivative is. All of these bundled and securitized assets or, is the best that we're going to get out of this meltdown a requirement that banks carry deeper cash reserves to cover their activities?

MACK: Well, first of all, the derivative market was a $500 million market that turned into a $60 trillion, with a "t", trillion dollar market. Still to this day is unregulated. Still to this day there are trillions of dollars of worth of derivatives that are laying on traders' desks that haven't even been signed yet.

So this was something that we have to get a firm grasp on. But you know what? To the bigger point, there is a huge debate going on right now in terms of the climate, the culture, the political climate, of whether the size and the scope of government.

No one is trying to say that we're trying to limit activity of corporations. We're just trying to make sure that there is an even playing field and a more effective framework which they can operate within. There should be more responsible for everyone to make sure that we can hold this economy and try to stop these bubbles and bursts from happening.

HARRIS: And yet, Susan, we know there is all kinds of resistance to that suggestion from Ryan, lobbyists are working against it, Wall Streeters are not happy about the idea of the government coming in and suggesting all kinds of new regulations, correct?

LISOVICZ: Well, I mean, you know, look, I mean, in a perfect world, and we are not living in one, the financial industry itself would be able to better manage what is going on. And clearly Wall Street did not do that. But you know, to have Washington come in, there is the fear that it knows even less than the industry does.

HARRIS: That's a great point

LISOVICZ: But you know what? A year from now, Tony, I hope I'm here talking about stocks, bonds and derivatives, that they'll be traded here where you can actually see them. And so some -- actually some exchanges really welcome the idea, it will increase business and I hope that I'll be talking about it someday so that it will be traded on a level playing field and we'll understand what it's all about.

HARRIS: And, Susan, Ryan, what you're talking about there, Susan, is better oversight of investments that don't trade on regulated exchanges right now. Is that what you're getting at?

LISOVICZ: Yes.

HARRIS: OK. Ryan, appreciate it. I'm so long in this segment, I mismanaged my time, as I normally do. Susan knows that.

Susan, good to see you. Ryan, thanks. Appreciate it.

MACK: Thank you. Thank you for having me.

HARRIS: CNN Money is a ranking the rescues. Check out our special report at CNNmoney.com.

Many of you have been trying to get your home loan modified but it is becoming a real nightmare.

(BEGIN VIDEO CLIP)

STEVEN ASCHER, CNN IREPORTER: It's a program that the banks really don't want to help the customers. All I'm looking for is a fixed rate and I cannot get any response.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

HARRIS: Let's get to our "Top Stories" now.

A vaccine for H1N1 could be ready weeks earlier than expected. Health and Human Services Secretary Kathleen Sebelius on ABC's "This Week."

(BEGIN VIDEO CLIP)

KATHLEEN SEBELIUS, HHS 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 object. We'll get the vaccine out the door as fast as it rolls out the production line.

(END VIDEO CLIP)

HARRIS: We've got some new video from California just in to the CNN NEWSROOM of Phillip Garrido and his wife Nancy there. Bail -- a bail hearing today ended just a short time ago. Bail was -- and there is Phillip Garrido -- was reset at $30 million at the hearing.

Garrido and his wife Nancy are accused of kidnapping, as you know, Jaycee Dugard when she was 11 and holding her captive for 18 years in tents and sheds in their backyard. They have pled not guilty.

Whoa. OK. Serena William says she let her passion and emotion get out of hand. Williams has been fined $10,000 for her profane outburst, and it was, but she faces possible suspension and could forfeit winnings once an investigation is completed. Williams ranted a line judge, essentially cost her the championship to Kim Clijsters. The truth is Williams was being thoroughly outplayed in that match.

So we want to know. Did Serene cross the line? Was her outburst justified or just out of line? Over the line? Send us your thoughts CNN.com/tony.

The government's home loan modification program has been in place six months now, some three million mortgages are eligible but just 12 percent modified. For many the process has been a frustrating journey into the banking nether world.

Have a look at this.

(BEGIN VIDEO CLIP)

GREG LYNCH, CNN IREPORTER: For the past six months what I've been enduring is this matter of documentation being lost, having to resent information, being told that I didn't have to pay my mortgage but to simply continue to remain in my home, at which point I would have some particular counselor contact me. I've waited for over six months and I've never got no call from no counselor. I've had my documentation lost twice.

ASCHER: Called Wells Fargo a couple weeks later just to confirm that they have information, what's the timeline, they said that the information is old, it's not -- it's not -- it's not relative. And I had to resent it. It's just extremely frustrating. It's old because it takes them several months to look at it. And nothing has changed but they will not continue with the loan mod process unless I resent it again.

(END VIDEO CLIP)

HARRIS: All right. Your personal finance editor Gerri Willis is back with us.

So, Gerri, look, why are banks seemingly dragging their feet on mortgage modifications?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, look, you know, Tony, we hear these stories all the time. It's not just Greg, it's not just Steve, it's a whole lot of people who are trying to get their mortgages modified and they're not being successful. And guess what, it's not their fault necessarily.

Banks are very slow getting off the mark and doing a lot of these modifications. And as you said at the top, some 12 percent, just 12 percent of people eligible for the program, have actually been helped. And they're just in the early stages of modification. There's a trial mod that happens first, and then the real modification kicks.

So this has been much slower than the administration wanted to see. And I know a lot of people are really, really frustrated with this. Tony? HARRIS: I wonder, what's the real incentive in doing this for the banks? I mean, we're getting, come on, you follow this all the time, we are getting indications that the housing market is starting to turn around and the biggest area of sales improvement seems to be in these foreclosed-upon homes.

So is there a real incentive here for these banks to modify these loans when they can just sort of perhaps resell them down the road?

WILLIS: You know, Tony, there really is some incentives. The administration put carrots in these programs...

HARRIS: Yes.

WILLIS: ... to get these deals done and it's hard, cold cash they're giving banks and lenders when they do do these modifications. So the plan has some carrots but I think there's so much confusion in the marketplace about what these homes are really worth, let's face it.

HARRIS: Yes.

WILLIS: You know, you want to see prices, ongoing deals done in the marketplace to understand what these homes are worth and a lot of markets are just not being done. So it's a big question mark out there for banks what to value these on their balance sheets.

HARRIS: That's a great point.

WILLIS: Having said that, I can really relate to the frustration of these people. And I have just a couple of ideas here for people who were in this situation. Really frustrated. Get an intermediary, get a counselor, a legitimate counselor from somebody like the National Foundation for Credit Counselors, nfcc.org.

If somebody tells you to stop paying on your mortgage in order to get the modification, don't do that.

HARRIS: Yes.

WILLIS: You really need somebody in the middle who knows how to negotiate with these banks and you get them to the phone. If they wait two, three months you're going to have to resubmit that data, that documentation, I know it's frustrating.

HARRIS: That is good information, Gerri, appreciate it. Thank you.

WILLIS: My pleasure.

HARRIS: The elusive leader of al Qaeda sends out a new audiotape. We will hear from our senior editor of Mideast affairs on the hunt for Osama bin Laden.

ANNOUNCER: I-report desk is sponsored by...

(COMMERCIAL BREAK)

HARRIS: A newly released audio message that is said to be from Osama bin Laden has emerged calling President Barack Obama vulnerable and unable to stop the wars in Iraq and Afghanistan.

Joining us from Berlin right now, our senior editor Middle East affairs Octavia Nasr. And Octavia, good to talk to you, provided, provided the message is from bin Laden, what's the strategic point here? It seems increasingly clear that al Qaeda has been degraded. It seems increasingly clear that al Qaeda seems incapable of pulling off al Qaeda signature strikes right now. And to the extent that it is, it's in a more limited area. What is the strategic point of this message?

OCTAVIA NASR, CNN MIDDLE EAST AFFAIRS SENIOR EDITOR: You're right, Tony. This seems to be a PR campaign. And nothing more, nothing less at this point. This is something that Osama bin Laden has been doing. Every 9/11 anniversary, he releases a tape.

As a matter of fact, I remember the first audio that he released on 9/11. It was short. That was the first time that he released a short message. I think at the time it was eight minutes. This one is about 11 minutes.

So bin Laden seems to have a fascination with talking to the American people. Every 9/11 anniversary he sends out a message and he calls it a message to the American people. This one is no different. It bears his marks. This sounds very much like him.

The rhetoric is very much that of Osama bin Laden. His intonation and so forth. So we have to doubt that it is bin Laden, but of course we cannot verify.

HARRIS: Yes.

NASR: We cannot authenticate. We wait for voice verification from the CIA to tell us that indeed it was him. But so far it was never been a fake Osama bin Laden audio or video so we have no doubt that it is him. But it's definitely a PR campaign. He's trying to basically put -- paint President Obama as someone who's weak, and someone who's being led by the Republicans and the neoconservative of the United States of America.

The date on the tape, on the audio, seems to put us back in June, somewhere.

HARRIS: Yes.

NASR: So this must have been recorded somewhere between the end of June and now, which is really the only news out of the state at that time bin Laden was alive and well enough...

HARRIS: Got you.

NASR: ... to record this message.

HARRIS: OK. Octavia Nasr from Berlin for us. Octavia, appreciate it, thank you.

Premiering September 27th, I want to make sure you're aware of this, a new weekly series to get people talking. Christiane Amanpour and provocative analysis of global stories that matter. Do you believe in the power of the interview? "AMANPOUR" every Sunday premiering September 27th.

Here is what we're working on for the next hour of CNN NEWSROOM.

The president on Wall Street today, we believe, early calling for action in reforming the financial services industry. How is that going to play in the nation's financial center? CNN's money team breaks it all down for us.

Richard Quest also joining us to talk about his exclusive interview with Treasury secretary Timothy Geithner, the man at the center to government's efforts to rescue and reform the financial system.

All of that and more ahead in the next hour of CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Work on health care reform is going on right now. The gang of six senators are still meeting at this hour trying to crack a bill. We will go to the capital soon as the meeting breaks up. Health care reform is the number one issue in many states.

CNN chief national correspondent John King tells us how the issue is playing in independent minded Maine.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT (voice-over): The calls start early. This one adamantly opposed to an expanded government role in health care.

UNIDENTIFIED FEMALE: I understand. We will get this right into the center for you.

KING: Minutes later, a very different perspective.

UNIDENTIFIED FEMALE: OK. So you would like her to consider -- to support the public option? All right. All right. Thank you for calling in.

KING: Senator Olympia Snowe is one of two Republican senators for Maine trying to carefully navigate the health care debate in Washington and in a ruggedly beautiful state whose politics often defy traditional levels.

(On camera): What makes Maine's politics so interesting in a time unpredictable is the state's independency. Think of it this way. This pot, 10 lobsters, is the state's electorate. Over here to my left we'll place three. A little more than three in 10 in Maine are registered as Democrats. Now to my right, we'll place three. It's actually a little less shy of three in 10 are registered as Republicans but we wouldn't want to break a lobster in half, would we?

What that leaves you is 4 in 10 in the middle. Unrolled voters Maine calls them are independents, which is why you can have a state that gives Obama such a big victory yet has two Republican senators.

ANGUS KING (I), FORMER MAINE GOVERNOR: I think it goes back into history and location a little bit away from the rest of the country. 100 years, the people who worked here and built Maine were independent-type people, farmers, fishermen, and they are about as independent as they get.

KING: Angus King served two terms as Maine governor, beginning in 1995. Elected as independent.

A. KING: It's what people in Maine vote for is what works. I would call it pragmatist. They appear less interested in partisan labels than in just getting the problems solved. And by the way, I think Maine is, in some ways, a future, a predictor of where the country is going. More and more people are easing away from the rabid attachment to the parties and they swing back and forth. That's where elections are decided.

JOE RAY, OWNER, FREE RANGE FISH & LOBSTER: Right now I'm a little confused about everything that's going on.

KING: Joe Ray's Portland Seafood business is doing well. Restaurant orders are down but overall sales are up as more people eat in. Full-time employees here get health care, even though Ray says it's expensive.

RAY: Keep good employees, you know. Get good people so you don't have to keep changing the flow of people who are coming in and out. Cost money to do that, too.

KING: But, Ray, a self-described fiscal conservative, said with a slow economy and record deficits, it is not the time for expensive health care changes.

RAY: I have three children. I'm concerned about what's going to happen to them. Are they going to be carrying this bill forever? That's my biggest concern. I mean I just think that right now he's out there spending, spending, spending, and I just hope that it helps the country.

KING: House meetings organized on the Internet were a staple of the Obama campaign, and are back now as part of the health care push. A half dozen friends and neighbors came to watch the president's big speech at (INAUDIBLE) Hogan's house in Kinney Bunk Port. Not bad, but not the intensity of last year's campaign.

UNIDENTIFIED MALE: I think there are lots of people who will get involved every two years.

(END VIDEOTAPE)