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American Morning
One Million Afghanistan Votes Tossed Because of Election Fraud; Is Afghanistan Another Vietnam?; Chamber of Commerce Victimized By Activists Holding Bogus News Conference; Obama Administration Issues New Pot Policy; Home Values to Drop in Next Year; Ma'am, Yes Ma'am!; Bailed Out Banks and Bonuses; Back to Business as Usual on Wall Street?; Secret Service Overload?; Small Budget, Huge Success; Energy Star Sticker Shock
Aired October 20, 2009 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Good morning to you. It's Tuesday, October 20th. Welcome to AMERICAN MORNING. I'm Kiran Chetry.
JOHN ROBERTS, CNN ANCHOR: Good morning to you. I'm John Roberts. Thanks for being with us. Here are the stories that we'll be telling you about in the next 15 minutes on the "Most News in the Morning."
Afghanistan's political future now in doubt and President Obama's decision to send more troops in limbo. A U.N.-backed panel has thrown out the results of this summer's presidential election. We're waiting for President Hamid Karzai to respond today. He is expected to hold a news conference at any moment. We're there live in Kabul for it.
CHETRY: And also, Americans appear to be very uneasy with the war in Afghanistan. Results of a new CNN/Opinion Research poll show an overwhelming majority now oppose sending more troops. Most of us agree with the notion that Afghanistan -- well, most people polled agree that Afghanistan is the next Vietnam.
ROBERTS: People who smoke or sell medical marijuana have less to fear about the feds coming after them this morning, but new U.S. pot policy is also leaving a lot of unanswered questions. How the Justice Department guidelines might affect enforcement in your state. We'll have that for you.
CHETRY: First, though, as we speak, the stakes for U.S. troops in Afghanistan could not be higher. Washington is right now without a legitimate partner in that nation after President Hamid Karzai's victory to a second term was branded a fraud. A U.N.-backed commission has thrown out more than a million votes from this summer's election and now a runoff could be in the near future.
We're standing by for a news conference, as we said, with Karzai. It could start at any minute.
Meanwhile, this morning, we're also tapping into the global resources of CNN. Our Chris Lawrence live on the ground in Kabul.
And, Chris, so this is a busy morning. It could be a game changer when it comes to what's going on with the election in Afghanistan.
CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: That's right, Kiran. You know, just a few minutes ago, we just got off the phone with one of the spokesman for Hamid Karzai's primary challenger and his potential opponent in any runoff, Abdullah Abdullah. And he said they are waiting to see what President Karzai says before they put forth a statement on what their intentions are.
But when we spoke to him last night, he seemed to indicate that he would be open to reaching some sort of solution or compromise with President Karzai. The key there is that if they can avoid a runoff election, which would have to take place very quickly, that would save a lot of NATO and U.S. forces from diverting from this mission, trying to secure yet another election, an election that could face some of the same problems as the first one, including fraud, violence, and ethnic tension -- Kiran.
CHETRY: Yes. And, Chris, over the weekend, the White House was saying that it wanted the Afghan elections finalized before it laid out its strategy for the country. Because, obviously, you know, you have to know who your partner is before you can really lay out a comprehensive strategy there. But overnight, we had Defense Chief Robert Gates seeming to strike a bit of a different tone.
LAWRENCE: Exactly, Kiran. These are, it sounds like, two different things. You've got the White House chief of staff, Rahm Emanuel, saying sending troops depends on whether the government in Kabul is legitimate and credible. On the other hand, you've got the defense secretary saying, we're not going to just sit on our hands, waiting for the outcome of this election and the emergence of a government in Kabul.
Secretary Gates says the reality is, it is very complicated now. It's not going to be simple tomorrow no matter what happens between the two candidates, and he thinks that President Obama will have to make his decision on troops in the context of this evolving process of finding a legitimate government here in Kabul -- Kiran.
CHETRY: Chris Lawrence for us this morning in Kabul. And again, as we said, the president, Hamid Karzai, could be holding a press conference at any moment and we'll go back to Kabul when that happens - John.
ROBERTS: The American people are now finding it harder to get behind the conflict in Afghanistan. A new CNN/Opinion Research Corporation poll shows a solid majority of you now oppose sending in more troops. And more than half of the country now believes this is turning into another Vietnam.
Our Candy Crowley now on why the hardest decision a president has to make just got even tougher.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Good morning, Kiran and John. You know, the White House says the president will not make decisions about Afghanistan according to public opinion, but if he did, the answer would be clear because Americans think they have some of the answers to the questions the president and his advisers are asking themselves.
(BEGIN VIDEOTAPE)
RAHM EMANUEL, WHITE HOUSE CHIEF OF STAFF: We had five meetings. There's another set of meetings this week and the following week.
CROWLEY (voice-over): The president may be undecided on Afghanistan and his advisers seem divided, but Americans are decidedly not, with the latest polls showing just 39 percent of Americans favor sending more U.S. troops to Afghanistan. Fifty-nine percent are opposed.
In general, the latest CNN/Opinion Research Corporation poll shows an America broadly skeptical that Afghanistan can pull itself together under a stable government and fearful of Vietnam syndrome, vaguely defined as fear of an unending, unwinnable war. Fifty-two percent think Afghanistan has turned into another Vietnam, 46 percent disagree with that. In the latter category, Senator John Kerry, a decorated war veteran who became known for his opposition to the Vietnam War upon his return home. Afghanistan, Kerry says emphatically, is not Vietnam.
SEN. JOHN KERRY (D), MASSACHUSETTS: We are here in Afghanistan because people attacked us here, in this most significant attack against the United States since Pearl Harbor. We are here because there are still people at large who are plotting against the United States of America. And we are here because the stability of this region is a critical, strategic interest to the United States.
CROWLEY: And that's one of the curious twists of the poll because most Americans agree with the senator. Sixty percent say it's necessary to keep troops in Afghanistan to prevent terrorism in the U.S., but at the same time, 57 percent of Americans say they oppose the war. CNN pollster Keating Holland thinks in part some Americans no longer believe terrorism should be fought at any cost.
KEATING HOLLAND, CNN POLLING DIRECTOR: Americans don't feel the same personal jeopardy when it comes to terrorism that they felt in 2001 and 2002. Others may simply see the benefit of preventing a terrorist attack somewhere in the United States being outweighed by the costs associated with a long, ongoing war that involves a lot of troops and a lot of money.
CROWLEY: It's not known when and what the president will decide about Afghanistan, but it's pretty clear that should he send more troops, he'll have a big sales job ahead of him with the American people.
(END VIDEOTAPE)
CROWLEY: And that job will be particularly difficult among older Americans, because when it comes to equating Afghanistan with Vietnam, the sentiment was strongest among seniors, one of the most reliable midterm voting blocs -- Kiran and John.
ROBERTS: Candy Crowley for us this morning. Candy, thanks. CHETRY: And also new this morning, breaking news out of Pakistan at six minutes past the hour. Two bombs exploding on a university campus in Islamabad. Reports of casualties are coming in as we speak. A hospital spokesperson telling CNN that one woman was killed and that 13 other people injured. Both attacks carried out by suicide bombers. We'll continue to bring you details as they become available.
ROBERTS: Americans are still divided over health care reform proposals moving through Congress, but according to a new poll, the so-called public option is gaining more support. "The Washington Post"/ABC News poll finds 57 percent of Americans now favor a government-run insurance plan to compete with private insurers. That's up from 52 percent support back in August. Forty percent of people polled are opposed. The survey also shows 56 percent favor a provision that mandates all Americans buy health insurance.
CHETRY: Well, Apple sold more Macs than iPhones than ever before in the fourth quarter, boosting its net income 47 percent, way past Wall Street estimates. That news sent shares of Apple up seven percent in after-hours trading. At one point, the company's stock hit an all-time high of $204 a share.
ROBERTS: Pay no attention to the man behind the podium. The U.S. Chamber of Commerce says it was victimized by activists holding a bogus news conference on Monday, declaring the organization had dropped its opposition to climate change legislation. The hoax was allegedly perpetrated by "The Yes Men," an activist group known for posing as corporate executives. The whole thing came to a head before a roomful of reporters at the National Press Club when a real chamber official confronted the imposter.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Who are you really, sir?
And do you have a business card? Are you with the U.S. Chamber?
UNIDENTIFIED MALE: I do. We can discuss that afterwards.
UNIDENTIFIED MALE: OK. Can I see your business card?
UNIDENTIFIED MALE: Can I see yours? Are you here representing the U.S. Chamber of commerce?
UNIDENTIFIED MALE: Yes, I am.
UNIDENTIFIED MALE: OK. Well, I work there and you do not look familiar to me at all.
Could I see your business card?
(END VIDEO CLIP)
ROBERTS: Show me your business card. No, show me yours. No, show me yours.
CHETRY: They both look like imposers. It's so strange.
ROBERTS: Several news organizations were duped into reporting the policy shift. CNN was not one of them, we should point out.
You got a business card?
CHETRY: It's so weird, though.
ROBERTS: Because you don't look familiar.
CHETRY: Right. But the other weird thing is, you couldn't make a fake business card using Chamber of Commerce logo? I mean, what's the business card back and forth?
ROBERTS: I mean, you've got to sort of admire the audacity of these guys.
CHETRY: Very weird. Very weird.
Well, still ahead, as we talked about yesterday, the administration taking a new tack when it comes to enforcing medical marijuana and people that use it and also the businesses that sell it. But this is a bit of a change from the Bush administration policy, but there are some local D.A.s who say, hey, we're doing what we want anyway.
It's eight and a half minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Every time that song plays, you know it's going to be a song about somebody taking your money.
CHETRY: That's right.
ROBERTS: Or a story about somebody taking your money.
CHETRY: And running. Welcome back to the Most News in the Morning. Sometimes you feel like maybe you're spending money faster than they can print it. I'm sure Ron Paul would have something to say about that.
ROBERTS: He will later.
CHETRY: He will later on today when the congressman joins us. But even worse, your bank is actually burning you with these overdraft fees. Help, though, may be on the way.
Gary and Christine have talked about this, these proposed changes that are going through. Well, Senate leaders have just proposed legislation that would limit those fees. If it's passed, you actually have a choice whether or not to participate in overdraft programs. As it stands now, sometimes you're automatically enrolled in them and then you get overdraft fees when you don't want them. It would also limit the number of overdraft fees that a bank could charge you in a given year. ROBERTS: The fertility doctor who treated the octomom has been kicked out of the American Society for Reproductive Medicine. Dr. Michael Kamrava was expelled for what the organization calls repeatedly violating the group's standards. Nadya Suleman said he implanted her with six embryos, far more than the national guidelines specified which led to eight births.
CHETRY: All right. Well, the dawn of the super-earths. European astronomers say they've discovered 32 planets outside of our solar system, most of them bigger than Jupiter. That's the biggest planet in our neighborhood. It increases the number of the so-called super-earths by more than 30 percent, but astronomers say that the planets don't seem like places where life could develop.
ROBERTS: Yes. The first thing is that gravity would be so strong that everything would be this big and flat.
CHETRY: Can we get back to us -- get back to us when it's a place we can actually visit.
ROBERTS: Exactly. Yes, you know. Set up a resort or something like that.
People who smoke prescription pot in states where it's legal no longer have to fear prosecution under federal law. That's the new U.S. policy from the Obama Justice Department. Basically, they're going to leave it to the states to decide what's legal and what's not. But there's a debate over whether this is a real turning point in the effort to legalize and tax marijuana nationwide. Our Jeanne Meserve has got both sides of that debate.
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: John and Kiran, the Justice Department is advising U.S. attorneys not to prosecute patients and caregivers that are following state medical marijuana laws. Will it make a difference? Well, that depends who you talk to.
(BEGIN VIDEOTAPE)
MESERVE (voice-over): At North Hollywood Compassionate Caregivers, a marijuana dispensary, relief that the federal government will no longer target legitimate users of medical marijuana.
RIGO MARTINEZ, MEDICAL MARIJUANA USER: Puts less stress on us. We don't have to worry about, you know, dealing with all that. I've gotten pulled over before for it.
MESERVE: Attorney General Eric Holder says it will no longer be a priority to use federal resources to prosecute patients with serious illnesses or their caregivers who are complying with state laws.
AARON HOUSTON, MARIJUANA POLICY PROJECT: This is a watershed moment and a major step forward in terms of federal medical marijuana policy.
MESERVE: But opponents of medical marijuana found something to cheer too. A memo to federal prosecutors outlining the new guidelines says, "Prosecution of commercial enterprises that unlawfully market and sell marijuana for profit continues to be an enforcement priority."
CALVINA FAY, DRUG FREE AMERICA FOUNDATION: We see these guidelines as giving clarity, allowing law enforcement to move forward and enforce our federal laws and shut down these storefront operations that are nothing more than a free ticket for drug trafficking.
MESERVE: The Bush administration prosecuted marijuana dispensaries and their customers when a federal drug law was violated. The new memo leaves open that possibility, but suggests prosecutors defer to state laws in the 14 states which permit medical marijuana.
TOM RILEY, BUSH ADMINISTRATION DRUG POLICY SPOKESMAN: People are still just as subject to prosecution, and I don't think that part of the message is just going to get out and I think it's going to make an already confused situation more chaotic.
(END VIDEOTAPE)
MESERVE: The Justice Department took pains to underline that drug enforcement is still a core priority, noting that marijuana distribution in the United States remains the single largest source of revenue for the Mexican cartels.
John and Kiran, back to you.
ROBERTS: And we'd like to hear your thoughts on the new federal guidelines for medical marijuana. Is it a step in the right direction or a retreat in the war on drugs? Give us a call on our bureau hotline at 1-877-my-AMFIX.
CHETRY: So there could be some more bad news for the housing market. Home values could be taking another dive. Our Christine Romans is joining us with more details on how you can stay ahead of this.
Fifteen minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning.
With or without a ticket, you can see U2's concert Sunday in Pasadena, California. The band announcing it will stream the sold-out show on YouTube. The concert starts at 8:30 Pacific Time, so for us folks on the East Coast, it's going to be a rather late night.
CHETRY: Let's have a viewing party.
ROBERTS: You know, we could probably just get up a little bit earlier, like an hour earlier, and watch the whole thing, because 8:30 Pacific, that'll be 11:30 Eastern it starts.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I'll be right there (ph).
CHETRY: There you go.
Well, Christine Romans is here. She's back, lady in red today.
ROMANS: I got the memo.
CHETRY: Who knows happens on these days? But what we're talking about is home prices falling yet again.
ROMANS: You know, we've been looking for stability in home prices. For the past two or three months, we've seen these little nuggets of - of stability that's made people think that maybe the home buyer tax credit and some other things and low prices were causing people to come into the market, and - and maybe things are bottoming out, but a new survey from a group called Fiserv - a financial services advisory firm - and they've been right about home prices for some time now.
They see more price declines ahead. So I'm going to repeat that - a new survey casting doubt on this idea that there's a bottoming in home prices. This is what they expect: another 11.3 percent decline in median home prices by June 2010. The weakest cities, Miami, Orlando, Las Vegas - folks, they're looking for almost a 30 percent price decline in Miami from here, a 27 price - percent price decline in Orlando from here, 23 percent in Vegas from here. And remember, these are very hard-hit areas.
But stability they found in Kennewick, Washington, a 3 percent price gain if you live there or you just bought there. Fairbanks and Anchorage are looking for a couple of percentage point increase in those places. New York City prices, the metro area here, they say the prices could fall another 17 percent by June 2011, so they think that this area - this is a big metro area - could underperform for the next couple of years.
Look, a couple of things here. They think that the - economists are saying they think that that first-time home buyer tax credit put a bottom into things in the summer, but that can't last forever, and even if it's extended, they're worried - many are people are worried that that can't drive a bottoming in the prices.
We still have a foreclosure crisis and a shadow inventory of foreclosures especially in towns like Miami, Orlando and Las Vegas.
ROBERTS: Another 30 percent in Miami? That's stunning. You - you got a numeral this morning for us?
ROMANS: I do - 41 days. I want to put this whole thing in perspective. Forty-one days...
CHETRY: I've put it on Twitter (ph).
ROMANS: Yes.
CHETRY: (INAUDIBLE), I think, might have been tongue in cheek, 41 days until a foreclosure? Another person said a waiting period before you're approved or rejected when you want to buy a home or how long it takes on average to secure a mortgage?
ROMANS: Forty-one days is how much time you have to get that first-time home buyer tax credit. You have to close on a home by December 1st.
Now, we know in Congress, there'll be hearings this week. The Senate and the House are having hearings to talk about extending it, but as it stands right now, 41 days left. You got to close on a house by December 1st to get that $8,000 first-time...
CHETRY: You got to close (ph)?
ROMANS: You got to close. That mean you got to be in the process right now - this is another reason why some are concerned that - that that stability might be temporary here. So we'll see if they extended it, but 41 days.
ROBERTS: Christine Romans "Minding Your Business" this morning. Thanks.
CHETRY: Still ahead, executive compensation. It feels like we're talking about home prices dropping and now we're talking about record bonuses on Wall Street. Are banks just back to business as usual? Our guest, Jill Schlesinger and William Cohan are here to break it down for us.
ROBERTS: And talk about a strong woman, the first woman to lead the Army's drill instructor school. Jason Carroll introduces you to her, coming right up.
It's 22 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. You know, it's no surprise, really, that the Army's new top drill sergeant idolizes General George Patton - old blood and guts.
ROBERTS: But consider this, though. The new commander is a woman. She is the first female to run one of the military's drill instructor schools.
Our Jason Carroll is here with her. Inspiring and - (INAUDIBLE), frightening to you story (ph)?
JASON CARROLL, CNN NATIONAL CORRESPONDENT: Yes. She is tough, tough, tough. I guess you have to be in that position.
You know, here's what's strange about this whole thing. You know what she told me? She was actually considering retiring early this year before this whole opportunity came up.
ROBERTS: Really? CARROLL: Oh, yes. Imagine if that had happened. Anyway, the person in charge of overseeing the drill sergeant training for the entire Army is no longer a he - it's a she, and in this new role, she will have a say in the training of every enlisted soldier.
(BEGIN VIDEOTAPE)
CARROLL (voice-over): Historically, this is the image of the military drill sergeant: a tough guy, immortalized in movies like "Full Metal Jacket."
UNIDENTIFIED MALE: You will not laugh! You will not cry!
CARROLL: That was then.
COMMAND SERGEANT MAJOR TERESA KING, U.S. ARMY: Let's go!
CARROLL: This is now.
KING: I'm getting the (INAUDIBLE).
CARROLL: At 48, Command Sergeant Major Teresa king is the first woman to lead the Army's drill sergeant training school.
CARROLL (on camera): What are you looking for? I mean, because it all pretty much looks like everyone's exercising to me.
KING: I'm looking for attention to detail, conformance.
CARROLL (voice-over): Before sunrise at Fort Jackson, South Carolina, King readies her drill instructor candidates for a rigorous run.
CARROLL (on camera): And what - what's wrong with that?
KING: That's too big, top (ph). You need to break it up.
UNIDENTIFIED MALE: Fall out (ph)!
CARROLL (voice-over): She leads by example. King runs the five- mile course from the front of the pack, outperforming men half her age.
STAFF SGT. LERON DELANEY, U.S. ARMY: She's older than me, so if I fall in line and she's still running, I'll feel bad, so yes.
CARROLL: Extinguishing those who think a woman can't be commandant.
SGT. FIRST CLASS MICHAEL CHILDS, U.S. ARMY: We've got to stay on top of our game even more than we used to with her because she's that sharp.
CARROLL: King says she wakes up some mornings still shocked she is commandant. KING: I had never considered it, although I've been in training for about seven years. But I never considered to just run the school (ph).
CARROLL: King's first Army job some 30 years ago was postal clerk, but her hero, General George Patton, inspired her.
KING: I saw that he had the respect of his men, and I saw he was resolute.
CARROLL: King eventually rose through the ranks, excelling at training infantrymen and paratroopers alike.
KING: I'm doing what I've always done. It's just now people are paying attention to it.
CARROLL: And to her opinions. The military prohibits women from serving in front-line combat roles. King trains men for combat and thinks it's time to train qualified women.
KING: I think if they can do it, they should be allowed to do it.
CARROLL: The reality, women make up 14 percent of active soldiers in the army. Some women question how many others will follow in King's footsteps.
OPERATIONS SGT. ANGELA ANDREWS, U.S. ARMY: I wouldn't say it opens the door, but it - it may, you know, crack it somewhat.
CARROLL: King says she will continue to lead by example.
KING: I have vision, and I believe I can cause people do some things that they thought they never could do.
(END VIDEOTAPE)
CARROLL: Quite inspiring. You know, at one point in her '30s, King was married to another soldier. The marriage failed and King turned to the Bible for inspiration. She actually considered joining the ministry as early as this year, but then, of course, this promotion came up.
You know, I also asked her, at 48 years old, how much longer she can continue to do this, keep up at this particular pace. She said, you know what, as long as I can keep leading from the front, I'm going to be out there.
ROBERTS: Yes. I mean, as long as she keeps running the other potential drill sergeants into the ground, I think she'll be all right.
CARROLL: Yes. I'm a runner. She could easily run me into the ground. That's for sure.
ROBERTS: One tough lady. CHETRY: Great story.
ROBERTS: Yes. Thanks, Jason.
Well, we're coming up on the half hour now. It's 28 minutes after the hour, checking your top stories.
A new poll shows almost the entire country believes Iran wants to bomb. Eighty-eight percent of all Americans believe Iran is trying to develop nuclear weapons, that's according to the latest CNN Opinion Research Corporation Poll. Most people question direct talks with the US to try to stop Iran and more than half - 54 percent - favor a military strike.
A Maryland scientist who helped discover evidence of water on the south pole of the moon has been arrested and charged with spying. He's expected in federal court later on today. The Justice Department says 52-year-old Stewart David Nozette attempted to pass classified information to an FBI agent posing as an Israeli intelligence officer. He has worked for the White House and the Defense Department and had special security clearance when he was employed by the Department of Energy.
With our kids getting more obese by the day, a new report says students need more fruit, veggies, whole grains, and a calorie cap for meals at their schools. The proposed changes will not be cheap, either. The report says cafeteria breakfast prices could jump 20 percent, lunches 4 percent. We're going to talk to the pediatrician who helped put the report together coming up in our third hour here at 8:30 Eastern on the most news in the morning - Kiran.
CHETRY: John, thanks. Well, with the Dow sitting at 10,000, that's a good thing, but nearly 10 percent of Americans out of work, not a good thing, of course.
It's no wonder that so many people are outraged when they hear, let's say, the latest news about investment banks like Goldman Sachs. Goldman took a big government bailout and now profits are soaring and the firm has a pool of nearly $17 billion set aside for executive compensation.
So are we right back to business as usual in the banking industry? We're "Minding Your Business" this morning with Jill Schlesinger. She's the editor-at-large at CBS MoneyWatch.com, and also William Cohan, contributing editor with "Fortune" magazine.
Great to see both of you this morning.
So explain it to us in plain terms, Jill, what's going on. It seems like the banks are back to business as usual. Main Street, still struggling.
JILL SCHLESINGER, EDITOR-AT-LARGE, CBSMONEYWATCH.COM: And it kind of stinks. And I wish I could give you a real rational explanation. The best thing I can really kind of pin it on is government stupidity. Because in the heat of the moment last fall, when things seemed to be falling apart, the government came up with this plan to bail out the financial system. But, evidently, there were no strings attached to that bailout. So once these companies paid back the money that the government injected into them, there were no rules in place about, A, how we are going to monitor, how they were going to use the money, and B, compensation.
And you know what we're left with? A real bad feeling in our stomachs. And, again, I wish we could make it different, but there's no going back and now changing the rules. We blew it as a country.
CHETRY: So two questions about that. At the time, we, members of Congress, lawmakers, the administration said there would be strings attached, and that, yes, this was a once in a lifetime thing that we had to do, pour billions of taxpayer dollars to prop up the system. But there were going to be changes coming down the road.
A year later, what's changed?
WILLIAM COHAN, CONTRIBUTOR, DAILYBEAST.COM: Well, there's a lot of things that have talked about being changed. And for the banks, especially the ones that have worked out well, Goldman Sachs, JPMorgan Chase, Morgan Stanley, they have a lot less competition. Their cost of goods sold, this raw material, the money that they need to run their businesses is virtually free. So like Jill said, there's a lot of unintended consequences here of which the big banks that are no longer part of the government bailout are doing well and making money and can pay their people what they want. And the rest of us on Main Street are sort of left scratching our heads, wondering how this could possibly have happened.
CHETRY: It's not all easy streaks for the banks. So there are many banks that are still struggling. And we saw Citigroup coming in under expectations, as well as others, and that's actually affecting lending in small businesses. So why the disconnect between why some banks are doing OK and others, we had the 99th collapse in California.
SCHLESINGER: Well, I think it's really about the types of banks and the clientele they serve. So you look at Bank of America and Citigroup. Of course, these are the two banks that still have our money. So this is a somewhat sobering moment, right?
We say, oh, we actually want them to do better to give us our money back, but they have a lot of exposure to consumer lending and commercial real estate. Those are the two areas that are really still hurting. Whereas, a Goldman Sachs as well as a Morgan Stanley, they have larger investment banking operations, larger trading operations. They have been able to weather this storm better. I don't expect that Citi or Bank of America is going to turn around anytime quickly and we have to be very concerned, because we want our money back as taxpayers.
CHETRY: Still an interesting thing, William, is that the Obama administration officials had been out all last week on the show saying they were disappointed, saying that it was upsetting to see all of this happening. That, you know, there's some responsibility to be had in corporate America with these banks, yet there's nothing happening within the administration right now or in Congress right now, that seems to be reining in any of the unregulated ways that the banks are cashing in on this climate.
COHAN: Right. They're talking out there on the TV shows, talking about unintended consequences and how disappointed they are. It's time for some action. I think Wall Street wants some action. They want the focus, understandably, off them. I think it's time for Congress, you know, obviously, they're preoccupied with the health care debate and they probably should be, but it's time to get to figuring out how to regulate Wall Street so this doesn't happen again.
It would be nice if some of these Wall Street CEOs, as they take their big bonuses this fall, come forward and explain to the American people how this happened and why, and what their role in this was.
CHETRY: And that's the interesting thing we were asking this morning. What did the banks really owe us? I mean, they are businesses, right? They have a right to make money. But then when you throw in the part about the fact that, you know, they're propped up or still in business because of taxpayer money. And then the other question is, so what does the government owe us?
SCHLESINGER: Well, I think what the government owes us is a real concerted effort for regulatory reform. And we are not going to get that. And it's clear from watching Barney Frank and the Financial Services Committee that things are getting watered down. Lobbying efforts by banks, especially small banks, by the way, had been enormous.
And I understand from a lot of the people in the sea suite in this larger institution, they would like really great regulatory reform that's smarter, because they feel like they're spinning their wheels a little bit, serving a lot of different masters.
They wanted consolidation, they wanted regulatory reform that was smart, and they aren't getting it. And I'll tell you what the government owes us is to not lose track of what happened and how we can prevent it. That seems to be the saddest part of the story to me.
CHETRY: All right. So let's end on a good note. Let's end on a happy note. The Dow up 10,000. If you were struggling last year looking at your 401(k)s, your 529s, your investments and you saw them down record drops for the year, we've come back. So what does that mean for the average person who left their money alone?
COHAN: Well, if you had the courage to leave your money in the market when the Dow was at 6,500 or you know you just got lazy or something, then now at 10,000, you're up more than 50 percent and you're beginning to see some recovery. But don't forget, it was at 14,000. So you're still down 40 percent. You're still feeling, you know, uncomfortable, probably, and if you're in the position where you are losing your job or the threat of losing your job, then that makes it very uncomfortable.
As Meredith Whitney, the analyst said, you know, Olive Garden is empty, but, you know, San Pedro here in Manhattan is full, because people in Manhattan or on Wall Street are feeling good about their lives and on Main Street people are struggling. And that's still a problem. A very big problem.
SCHLESINGER: And I think that that's going to actually end up being a bigger problem over time. I think there's been a gap between the middle and the upper. Some of that gap was filled in with this funny money, where we saw a housing boom in cheap money. And now with that cheap money gone and housing in the toilet, people are waking up today in the middle of America saying, hey, this is ridiculous. These rich guys have way more money than I have. And you know what, that is going to persist. And it's going to continue to persist. And it's going to be a problem for this administration.
CHETRY: We'll have to see how it shakes out.
Jill Schlesinger, William Cohan, thanks for your insights today.
SCHLESINGER: Thank you.
COHAN: Thank you.
CHETRY: John.
ROBERTS: Well, they investigate counterfeiting, fraud, identity theft. They also provide forensics and coordinate national specialty security events. Oh, and they also protect the president. Is the United States Secret Service stretched too thin? We'll ask that question and get some answers coming right up.
Thirty-six minutes after the hour.
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ROBERTS: They are agents in the shadows, who do this a lot. The Secret Service, trained to take a bullet for the president, but that's not their only mission. They track cases of financial fraud and protect your identity. It's got some people asking, is it too much?
Brian Todd takes a look.
(BEGIN VIDEOTAPE)
BRIAN TODD, CNN CORRESPONDENT (voice-over): They shadow the president at every turn, protecting him, the vice president, their families, dignitaries. They move ahead of the president to handle security on his trips and investigate threats against him.
Could those crucial missions be compromised by so-called mission creep?
The U.S. Secret Service also investigates financial crimes, including fraud, identity theft and even counterfeiting. That was, in fact, the agency's first mission when it was committed in 1865. But now, it even helps track missing children and a recent Congressional reports suggests the service may be overstretched, "If there were an evaluation of the agency's two missions, it might be determined that it is ineffective for the USS to conduct its protection mission and investigate financial crimes."
The author of a recent book on the service has already determined that.
RON KESSLER, AUTHOR, "IN THE PRESIDENT'S SECRET SERVICE": The fact is that they're -- the Secret Service is totally overloaded. They have so many extra duties that they're performing and the number of agents has not really increased.
TODD: Contacted by CNN, a Secret Service spokesman strongly disputed those assessments, saying the agency is not overstretched and that its ranks have increased. The spokesman says last year, while agents protected several candidates during the longest and most expensive campaign in American history, the Secret Service also had its biggest haul ever of financial assets seized from criminals -- $141 million. A former Secret Service officer we spoke to says agents shouldn't be just bodyguards.
WILLIAM PICKLE, FORMER SECRET SERVICE AGENT IN CHARGE: After a number of years in protection, you need to send those agents back out to do criminal work, to stimulate them, because what we've found is good criminal investigators make very good protection agents.
TODD: But is the Secret Service dealing with increased threats to the president?
A report last spring by the Department of Homeland Security says, "right-wing extremists have capitalized on the election of the first African-American president and are focusing their efforts to recruit new members."
But that same report also says those groups have not yet turned to attack planning. And the Secret Service spokesman we dealt with says, contrary to recent media reports, President Obama is not receiving more threats than other presidents.
(on camera): The spokesman says Mr. Obama's threats spiked right after his inauguration, but that right now they're within the same range as his two immediate predecessors.
Brian Todd, CNN, Washington.
(END VIDEOTAPE)
CHETRY: Brian Todd for us. Thanks so much.
We're going to take a quick break.
When we come back, extreme weather. There's cold. It's getting real cold around here, in the south and the east. Jacqui Jeras has a look at what we can expect across the country in just a moment.
It's 42 minutes after the hour.
(COMMERCIAL BREAK) KIRAN CHETRY, CNN ANCHOR: Welcome back to the Most News in the Morning. A live look at New York City right now, looking East over Central Park. It's 47 degrees right now. It's going to go up to 65 today. Should be mostly sunny, so not a bad day.
We're 15 minutes before the top of the hour right now, and it's time to fast forward through the stories that you'll be hearing about on CNN today. This morning, President Obama turns his attention to the war in Iraq. At 10:40 Eastern Time, he welcomes Prime Minister Nouri Al-Maliki to the oval office. Vice President Joe Biden and Secretary of State Hillary Clinton met with Maliki yesterday.
And speaking of the vice president, he heads to Warsaw, Poland today for the first of three stops in Eastern Europe. He's going to be meeting with the heads of states in Poland, Romania, as well as the Czech Republic, discussing a range of issues, including the administration's plans for missile defense in the region.
And also with the economy coming back, investors are hoping the bull run on wall street will continue. The Dow starts today at 10,092, that's after a 96-point gain yesterday. Overseas, Japan's Nikkei Index as well as Hong Kong's Hang Seng both closed higher overnight. So, that's a bit of a bright spot. I mean, it's some of the bad news that we've been talking about like home prices and unemployement.
ROBERTS: And Dow futures up again today. But, you know, what's really performing well is the Nasdaq. Nasdaq futures are up just as much as the Dow futures and the trend has been like this on the Nasdaq.
CHETRY: Is apple part of the Nasdaq?
ROBERTS: I don't know. I can't remember if it's Dow or Nasdaq.
CHETRY: They had an amazing run.
ROBERTS: Jacqui Jeras is at the weather center in Atlanta for us this morning checking on the extreme weather across the country. A little chilly out there right now in here New York. I need an extra blanket, but supposed to be a nice day later on.
JACQUI JERAS, AMS METEOROLOGIST: Yeah. Overall, you know, it's going to be a cold start, but the air is really, really dry, so that allows it to heat up just like that. So, we'll recover very nicely and see a nice afternoon. But in the meantime, check out all the frost and freeze advisories in effect from New England all the way throughout parts of the deep South.
We've got freeze warnings in effect across parts of, just outside the Atlanta metro, on up towards the Chattanooga area, up into Knoxville as well, where the temperatures this morning are already down into the 30s. Look at that, 38 degrees over towards the Chattanooga area. And as we head into the Northeast, we've got some advisories in effect here too, where the temperatures are feeling like the 30s and 40-degree range. There, you can see New York City, over towards Hoboken, 43, 39 over there, and down towards the Washington D.C., temperatures in the upper 30s here today as well. But we're going to be recovering. Looking for highs in the 60s across much of the Northeastern quarter and there you can see the 70s across much of the Southeast.
We could see a couple of record lows this morning in the deep South or parts of Florida. Now, our ridge stays in place here over the next couple of days, bringing beautiful conditions, wet weather across the upper Midwest today. If you are trying to travel, we expect delays in Dallas and Denver because of wind. Minneapolis and Salt Lake City due to low clouds and rain. Overall, pretty nice day. Kiran and John?
ROBERTS: All right. Looking forward to it. Thanks Jacqui. Apple in the Nasdaq, by the way.
CHETRY: There you go.
ROBERTS: Stock currently $189 a share.
CHETRY: Wow! Didn't it close at $204?
ROBERTS: I think it's been trading in a range. They've been selling so many of those little iPhones that you know - if you had something you're seeing this morning. If you invested $10,000 in apple, I think 6 months, at the beginning of the year, it would be worth $23,000 now. So, some people are making money these days.
CHETRY: That's right. Forrest Gump, among others.
Meanwhile, did you see "Paranormal Activity" yet?
ROBERTS: No. I've seen the trailer, though. Kind of like a "Blair Witch Project" that takes place in the bedroom.
CHETRY: It cost $11,000 to make. It's now been raking in millions. Some of the big movie houses scratching their heads because they didn't even have a big ad campaign. Our Kareen Wynter is going to look into it just a moment. Forty-eight minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning. Talk about return on investment, this one makes apple's increase in value look like child's play. Remember "The Blair Witch Project," the low- budget film turned into a surprise monster at the box office. Now, a thriller called "Paranormal Activity" is following the scene formula. Our Kareen Wynter shows you this morning how small budgets are scaring Hollywood.
(BEGIN VIDEOTAPE)
KAREEN WYNTER, CNN CORRESPONDENT: John and Kiran, good morning. This small budget film is scaring off the competition, but could it trigger a new trend in Hollywood? (voice-over): When it comes to horror, suspense...
Hollywood has a history of getting more bang for its buck. Low- budget films acquired by studios that become blockbuster hits. While these big-screen breakouts rarely happen, "Paranormal Activity," a new thriller from Paramount is breaking rules in Hollywood and getting noticed.
DANIEL MYRICK, CO-DIRECTOR, "THE BLAIR WITCH PROJECT": You don't need to spend a ton of money to turn a profit.
WYNTER: That could be Hollywood's new motto says Daniel Myrick, especially in this economy, where studios are counting pennies. Myrick directed the 1999 surprise blockbuster, "The Blair Witch Project," shot on a $30,000 budget. The horror flick eventually grossed $140 million domestically.
Box-office experts say within the last decade, no other microbudget film has come close to "Blair Witch's" success. But that could change.
"Paranormal Activity," which cost $15,000 to make, has already reeled in more than $30 million in four weeks.
MYRICK: Studios realize that you don't need to spend a ton of money on marketing and talent and production values to generate profit. And I like to think the economy is going to force these studios to kind of re-evaluate.
WYNTER: Experts say Paramount Studios used a creative strategy that shifted from the classic marketing of print and broadcast to social media Web sites like Twitter.
(on camera): The grassroots viral campaign e-mailed and tweeted people, asking them to demand that "Paranormal Activity" be shown in their town.
(voice-over): Still, Variety magazine's Ted Johnson cautions against calling "Paranormal's" blueprint the new norm in Hollywood.
TED JOHNSON, MANAGING EDITOR, VARIETY: It remains to be seen whether we're going to see this big rush of people trying to snap up these $10,000, $20,000 movies. The ones that are really good are far and few between.
WYNTER: Besides, he says, marketing a movie on a meager budget, is one formula Hollywood is still trying to figure out.
(on camera): Another point Johnson makes, and this isn't to take away from the film's success, but Halloween is right around the corner, so filling seats at a scary movie isn't the most difficult thing -- John, Kiran.
(END VIDEOTAPE)
ROBERTS: Our executive producer is saying that his son saw "Paranormal Activity" and slept with the lights on for four days.
CHETRY: Yes. That's why I avoid them. I can't be scared. Sorry.
Still ahead, I do thin you remember after cash for clunkers, we talked maybe cash for clunkers when it came to appliances.
ROBERTS: Their washing machine.
CHETRY: Right. Trading your old stuff and get the one with the Energy Star seal because you think you're saving more energy. Our Mary Snow found that may not be the case. She'll explain.
ROBERTS: All right. We're also covering the latest news out of Afghanistan. Will there be a run-off election? The Electoral Complaints Commission says there needs to be one, but could they come up with a power-sharing arrangement that will obviate the need for one? We're following it. Stay with us. It's 55 minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Fifty-seven minutes after the hour. Coming up on the Most News in the Morning. The profitability of right wing talk radio has drowned out nearly all opposing viewpoints, but do these powerful voices actually influence the way you vote? Our special series, "Talk Radio," continues in 20 minutes -- Kiran.
CHETRY: Remember the rebate program for appliances that followed cash for clunkers? Customers were encouraged to trade in their old energy-burning washers and dryers, refrigerators for new ones that had Energy Star stickers for efficiency. But there is something that you may not know about those Energy Stars.
Our Mary Snow found that what you don't know could cost you.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT: John and Kiran, those Energy Star stickers you see on appliances are put there voluntarily by manufacturers. But now a new government report has found some holes in claims made by appliance makers, and so did "Consumer Reports."
(voice-over): The Energy Star label is intended to guarantee consumers a product is energy efficient. But at "Consumer Reports" labs, Mark Connelly, has found appliances like this freezer that should not have the Energy Star logo.
MARK CONNELLY, CONSUMER REPORTS DEPUTY TECH. DIRECTOR: In our labs, we found it used a lot more energy than it claimed.
SNOW (on camera): So, can a manufacturer just put on an Energy Star sticker if it wants to?
CONNELLY: Well, they're supposed to have these products tested, and they do, but they themselves test it. SNOW: So if you had not run this test, people would buy this thinking, "OK, I'm saving on energy, and I'm saving money."
CONNELLY: Correct.
SNOW: But in reality?
CONNELLY: In reality, it's using twice as much energy as other claims.
SNOW (voice-over): In an appliance like this, claiming an energy bill of $60 a year could actually be double. Of 100 of products he tests every year, he estimates 5 to 10 percent should not be labeled Energy Star.
CONNELLY: For the most part, the products that we test that claim to be Energy Star are, in fact, telling the truth. But, again, there is enough products out there that give us some concern.
SNOW: Those concerns are shared by the Department of Energy's inspector general, who in an audit found the department had not implemented plan improvements in the Energy Star program. The report concludes that those delays could reduce consumer confidence in the integrity of the Energy Star label.
We asked the Department of Energy's Cathy Zoi about the criticisms.
CATHY ZOI, DEPARTMENT OF ENERGY: The inspector general identified a number of improvements to the program, and frankly, we agree with those improvements, and we put a plan in place to get all of those improvements implemented.
SNOW: But as the Department of Energy works on those improvements, it's in the process of planning a rebate program for consumers buying Energy Star products. Three hundred million dollars of stimulus money is being used. Can consumers be confident those products are as energy efficient as they claim to be?
ZOI: There have been examples that are very rare where a manufacturer has misused or misappropriated, misapplied the Energy Star logo. And when the Department of Energy or when the EPA has found out about that, they've taken steps, they've taken action, and those manufacturers have had to recompense people who have bought those appliances.
SNOW (on camera): We also asked the DOE's Cathy Zoi about independent testing. She says the Department has started using a third party to test some products and wants to expand that -- John and Kiran.
(END VIDEOTAPE)
CHETRY: Mary Snow for us. Thanks.
