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American Morning

More Attempts to Stop Oil Leak; Stock Market Selloff

Aired May 21, 2010 - 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 (in progress): -- to immediately stop using a toxic chemical to break up the slick.

JOHN ROBERTS, CNN ANCHOR: So what do you think about all of this?

The amfix (ph) blog is up and running, as it is everyday. Join the live conversation going on right now, at CNN.com/amfix.

CHETRY: There are millions of Americans that are waking up this morning saying, is my 401(k) OK today?

ROBERTS: Yes, the bears are back. The stock market now officially in a state of correction again, after plunging another 376 points yesterday.

CHETRY: Christie Romans is here minding your business this morning. And we're talking about all the market uncertainty -- Christiane, at the same time that we're talking about the Senate passing historic financial regulation reforms.

CHRISTINE ROMANS, CNN CORRESPONDENT: And they're connected. They are connected. Because you've got people looking at a market that's coming really unglued on a -- on a variety of different global fears at the very same time you're talking about an epic change in the landscape for how Wall Street works.

So this is what happened yesterday -- a 376 point decline in the Dow Jones Industrials. The Dow is now down 12 percent from its peak back in April. This is officially correction territory. If you own bank stocks in your 401(k) -- and you probably do because they're in all the big mutual funds -- bank stocks are down about 17 percent just over the past couple of weeks. That's a very big and dramatic move.

This is the first official correction since that big rally began last March. And a lot of traders were telling me yesterday and market professionals -- people who run billions of dollars worth of money were telling me yesterday it felt like one of the bad old days of February and March, 200.

Why?

You look -- you look into the market internals, what the -- what the different signals inside the market are telling you. Fear is running very, very hot and also you've got more than 90 percent of the stocks -- 90 percent of the stocks are trading more than 50 days -- below their 50 day moving average. That's a technical term, but it means that you're getting hammered on just about anything?

Why?

The crisis in Europe, the future of the euro.

Will this, quote, unquote, sovereign debt crisis hurt the global economic recovery?

How badly will that hurt America's economic recovery?

And Wall Street reform -- you throw that on there one day after Angela Merkel and German finance officials put some very strict trading restrictions in Europe and then you're talking about new restrictions here. You've got many people who are close to Wall Street saying it all comes at a time that it could hurt the flow of credit.

Now, it's not just stocks. You've got big swings in currencies. You've got credit markets roiled. We're watching things that are called spreads between some of these bond instruments and they're showing us that -- that credit is starting to get more expensive and difficult to obtain.

All of these things are -- are dangerous for -- for a global economic recovery.

ROBERTS: Yes. Not too long ago, you sat right there and you said some analysts are predicting the Dow is going to go to 12000, go to 14000.

Has the entire mood turned around that much or is this just, you know, the typical Wall Street jitters and then underlying that, the fundamentals showing an increase are still pretty strong?

ROMANS: These are not the typical Wall Street jitters, because it's everything. It's -- it's currencies, it's credit markets, it's stocks, it's oil, it's emerging markets. We're all interconnected. And with everyone looking back to 1997, when you have a devaluation of the Thai baht...

CHETRY: Right.

ROMANS: -- it sparked a -- you know (INAUDIBLE)...

ROBERTS: So I guess all those folks were just a little too optimistic.

ROMANS: Well, those are the same folks now, though, who are saying when you look at 90 percent of the stocks trading so weakly, that's their buy signal. So they say they're in buying. Of course, that's -- I mean that's the way they are.

But other people say a 12 percent correction, maybe you have a full-fledged bear market. That would be 20 percent to be a full- fledged bear market. It -- it's just -- we've been talking about the volatility. It's just a little treacherous right here. And there are a lot of macroeconomic reasons for that. It's not just oh, the market's coming -- coming off because it had such a big run.

That a lot of real fundamental questions in the global economy and in the global recession and that's what's got people so nervous. They're taking risk off the table. People don't want to put their money out and a risky place right now.

CHETRY: And, quickly, you said that this is interconnected with the Senate passing this reform.

In what way?

ROMANS: Some of the big banks are saying they're worried that some of the provisions -- and we're going to get into this more next hour -- but some of the provisions in Wall Street reform could choke the availability of credit. Quite frankly, Wall Street being able to do whatever it wanted to do was one of the reasons why we had so much credit available over the past 10 or 15 years.

They -- they aren't just -- well, they're -- they're opposed to some of the things that might cost them some money, right?

So they're definitely talking their own book. But when you have, on top of the naked short selling ban in Germany a couple days ago and then this, you have some people on Wall Street saying we -- we don't know if -- if this is the time to be doing this.

Consumers will say, yes, this is the time. Eighteen months ago, actually, was a good time, too. But it's got...

CHETRY: Exactly.

ROMANS: It's got to get fixed.

ROBERTS: So (INAUDIBLE) overseas, we'll see how it goes today.

ROMANS: Yes.

ROBERTS: Christine Romans, thanks.

There's been another gate crashing at the White House. Let's have a look here. See this little furry guy scurrying past the president at the Rose Garden podium?

He came scampering out of the bushes yesterday. Ironic that a mouse would appear just as the president was talking about reforming the way that we regulate the fat cat bankers on Wall Street. I think the mouse would be on the -- the bad end of that deal.

CHETRY: Exactly.

Well, also new this morning, a new terror threat. An intelligence official saying that the Pakistani Taliban is plotting to strike in the U.S. after it came so close three weeks ago to that attack in Times Square, the foiled car bomb. The information is said to be coming from many streams of intelligence, including the man accused of driving that car bomb into New York City.

Well, it's probably not a good time to have a vacancy, then, at the very top of our terror fighting community. But that's exactly what we have right now, after the director of National Intelligence, Dennis Blair, announced he's stepping down, effective today.

Jeanne Meserve is live for us in Washington.

And so let's start with the new threat.

What are your sources telling you about I guess some of the details about how and -- and -- and why and when they want to strike?

JEANNE MESERVE, HOMELAND SECURITY CORRESPONDENT: Kiran, a U.S. official tells CNN that U.S. intelligence has strong reason to believe that the Pakistani Taliban is actively plotting to hit the U.S. homeland and American interests overseas. The threat information is not so detailed that it names specific cities, the official said, but it comes from, as you said, multiple streams of intelligence, including from Faisal Shahzad, the suspected in the attempted bombing of Times Square.

Administration officials have linked Shahzad to the Pakistani Taliban, the TTP, and the source says that during a trip earlier this week, CIA Director Leon Panetta and National Security Adviser Jim Jones relayed the new terror threat information to the Pakistani government -- Kiran.

CHETRY: And -- and this comes at the same time as the resignation of Dennis Blair, the director of National Intelligence.

What impact, if any, are you hearing this could have?

MESERVE: Well, he's going to be handing in his resignation today. It will be effective a week from today, although President Obama praised Blair in a written statement for his remarkable record of service. It is no secret that there have been tensions between Blair and the White House and other intelligence agencies and leaders.

Congressional sources say that Blair has been unhappy and frustrated, losing turf battles to CIA Director Panetta. One source familiar with the situation said the White House just didn't share the same view of what the DNI should be.

In addition, there have been these two recent near terrorist attacks within the U.S., the Times Square bombing and the attempt on Christmas Day to bring down an airliner. And Blair, as coordinator of the nation's 16 intelligence agencies, took some of the blame.

The White House has already spoken to two potential replacements, John Hamre, a Defense official in the Clinton administration and General Jim Clapper, Defense undersecretary for intelligence -- Kiran.

CHETRY: Jeanne Meserve for us this morning.

Thanks.

ROBERTS: And just a little more than an hour from now, at 7:15 Eastern, we're going to be speaking with Fran Townsend, the former homeland security adviser and CNN contributor, about the state of our intelligence community and this new threat from the Pakistani Taliban.

CHETRY: Also new this morning, it appears that one thing that helped this thief make way -- make out with all of that modern art in the Paris Modern Art Museum -- five masterpieces -- was a broken alarm system. The system has been down since the end of March, even after undergoing an $18 million upgrade back in 2006.

In 30 minutes, we're going to be speaking with Robert Whitman.

He's the founder of the FBI Art Crime Team.

ROBERTS: Seven time Tour de France winner, Lance Armstrong, is denying allegations that he has used performance enhancing drugs. The claims coming from e-mails sent by fellow American cyclist and one time teammate, Floyd Landis. Landis is now admitting that he has doped for years. Armstrong yesterday questioning Landis' motives.

(BEGIN VIDEO CLIP)

LANCE ARMSTRONG: I would remind everybody that this is a man that's been under oath several times and had a very good -- this is a man that -- who wrote a book for profit that had a completely different version. (INAUDIBLE) guys, this is somebody that -- that took (INAUDIBLE) million dollars from innocent people for his defense under (INAUDIBLE).

They now want to (INAUDIBLE) if his story changes. So we're just as -- I should say we're a little confused, maybe just as confused as you guys.

(END VIDEO CLIP)

ROBERTS: Hours after Armstrong publicly denied the doping claims, he crashed in a Tour California cycling race. No broken bones, but he did have a rather nasty cut on his face. He scraped up his arm and required some stitches on his elbow, also hurt his leg.

Armstrong tried to keep racing, but says his eye was just too swollen to see, so he had to drop out.

At 7:40 Eastern, we're going to talk to the author of "Tour de Lance," "Bicycling" magazine's Bill Strickland, about all of this.

CHETRY: That looks painful. Go.

ROBERTS: You know, if you fall down, you get hurt. And they -- most of these guys, Lance included, get back up and start riding.

CHETRY: Yes. ROBERTS: Remember, he broke his collarbone last year and was back for the Tour de France.

CHETRY: Right. Wow!

ROBERTS: They're tough.

CHETRY: Yes, they are.

Well, nine minutes after the hour, we get a check of this morning's weather headlines.

(WEATHER REPORT)

ROBERTS: Still to come on the most news in the morning, hundreds of thousands of gallons of a less toxic oil dispersant just sitting around at a taxpayer warehouse.

Why isn't BP using it on the oil spill?

A live report from our Ed Lavandera coming right up.

Ten minutes now after the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back.

Thirteen minutes past the hour.

And we're following the oil spill continuing in the Gulf, growing out of control this morning. And we have difficult to see video of a pristine Louisiana bch just covered in crude. If you look at these pictures, they're from Elmer's Island, Louisiana, about 70 miles west of the mouth of the Mississippi. And there you see it, literally looking like chocolate pudding -- thick, syrupy crude oil covering a four mile stretch of bch.

And no one saw it coming. According to Li -- Louisiana's governor, the oil was never visible as it headed toward shore and it must have been traveling beneath the ocean's surface.

ROBERTS: Well, there are other new developments to tell you about this morning. BP now admitting what experts have been saying for weeks, that this disaster is far worse than they thought. But they won't say just how much oil might be spewing into the Gulf. BP does say that it hopes to have the spewing well shut off by some time next week. And now, after more than 30 days on the sidelines, the EPA is stepping into the fray, ordering BP to change to a less toxic chemical dispersant to help break up the oil.

Let's go to our Ed Lavandera now.

He's live in Pasadena, Texas with a CNN exclusive -- and, Ed, you've broke down (ph) some stockpiles of another dispersant that's said to be less toxic and even more effective than what's being used. Why is it in a warehouse?

ED LAVANDERA, CNN CORRESPONDENT: that's a great question, John, and we still haven't been able to get to the bottom of that. Quite frankly, about a week ago, BP announced that it would also start using something called Sea Brat 4 (ph) in addition to the dispersant called Corexit, which many environmentalists had -- had been very worried about, calling it simply just too toxic.

But so far, in this process of trying to battle this oil spill, some more than 650,000 gallons of dispersant have been used. About 55,000 gallons of it has been used underwater.

So the question becomes, why is all of this sitting here, outside of Houston, Texas, when it should -- when it had been bought up by BP to be used in the -- to battle the oil spill in the Gulf.

(BEGIN VIDEOTAPE)

LAVANDERA (voice-over): Hundreds of containers are just sitting here in the Houston sun. To some, it's just another example of the mismanagement of the oil spill. The containers are full of a chemical dispersant called Sea Brat 4.

Why is it sitting here and not in the ocean instead?

No one really knows, especially says BP is on record as saying it would use the stuff.

DOUG SUTTLES, COO, BP: We also have a second product now identified and used called Sea Brat 4, which we'll begin introducing into the process, as well.

LAVANDERA (on camera): That's what BP said almost a week ago. But we found the Sea Brat 4 just sitting here in an industrial park outside of Houston, Texas. You're looking at it -- almost 100,000 gallons of the less toxic dispersant.

Guess who ordered it?

BP did -- on May 4th, almost three weeks ago.

JOHN SHEFFIELD, PRESIDENT, ALABASTER CORPORATION: This is Sea Brat. It's in totes ready for delivery.

LAVANDERA: (voice-over): John Sheffield is president of the company that makes Sea Brat 4.

(on camera): Do you think it's weird that this stuff is just sitting here in the Houston area?

SHEFFIELD: It's ridiculous. It's radicals, you know. I think something is intentionally trying to stop us from getting our product to the water.

UNIDENTIFIED MALE: Spray on. LAVANDERA (voice-over): EPA and Coast Guard officials say there's nothing stopping BP from using Sea Brat 4. Sheffield says that by now, he could be making 50,000 to 100,000 gallons of dispersant a day. But a BP spokesman will only say the company had to use what was readily available and stockpiled and it has been asked to find add alternatives to the current dispersant, Corexit, and that's what they're in the process of doing. Getting a direct answer is even hard for Congress to get, as they grilled BP executive Lamar McKay this week about the issue.

REP. JERROLD NADLER, (D) NEW YORK: Who decided which dispersant to use?

BP?

LAMAR MCKAY, CHAIRMAN & PRESIDENT, BP AMERICA: I don't know and...

NADLER: You don't know?

MCKAY: I don't know the individual who decided when...

NADLER: I didn't ask the individual.

MCKAY: I don't...

NADLER: Was it BP who decided or was it the national -- the government who decided or the national incident command?

MCKAY: I don't know. I don't know.

NADLER: You don't know.

Could you find out for us, please?

MCKAY: Yes.

LAVANDERA: Easier said than done. There's still no word on who's making that call, while 100,000 gallons of potential help sits hundreds of miles away.

(END VIDEOTAPE)

LAVANDERA: John, we're in that window that EPA has given that -- BP that deadline about changing dispersants. But the EPA and Coast Guard insist BP has been able to use this material all along.

And interestingly enough, the company that makes Corexit, the dispersant currently being used, announced earlier this week that it planned on making $40 million in profits by the end of this week -- John.

ROBERTS: All right.

Yes, well, you don't sell a lot of chemical without making a lot of money. Ed Lavandera for us this morning in Texas.

Ed, thanks.

CHETRY: And they're calling this the Kevin Costner solution. Perhaps a Hollywood star may be onto something when it comes to solutions for the Gulf oil slick. And BP, in fact, is planning to test actor Kevin Costner's stainless steel centrifugal oil separators next week. They're $24 million machines. There you see them. And they basically are big vacuums that suck up the spill, spin it, churn out the oil on one end and nearly 100 percent of clean water on the other that can then be put back into the water -- into the Gulf.

Costner bought this technology after the Exxon Valdez disaster and has been refining it ever since.

Well, coming up next on the most news in the morning, North Korea threatening all out war amid accusations that it sank a South Korean warship. We have a live report from Seoul coming up next.

Eighteen minutes past the hour.

(COMMERCIAL BREAK)

ROBERTS: Twenty-one-and-a-half minutes after the hour.

Secretary of State Hillary Clinton is in Japan this morning and heading to South Korea in a few days. High on the agenda there, the growing talk of war between North and South Korea.

CHETRY: It happened after South Korea announced that it can prove that Pyongyang sunk one of its ships in March, killing 46 sailors.

Our John Vause is in Seoul.

He joins us now on the phone.

And what are we hearing right now from Secretary Clinton about this issue, as well?

JOHN VAUSE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, hi.

Kiran.

Well, during a news conference a short time ago in Tokyo, Secretary Clinton really didn't hold back. She said North Korea must face international consequences for the sinking of the Cheonan and the North must stop this provocative behavior.

Those will welcome and expected words for the South Koreans. Today, President Lee Myung-bak held a rare emergency security meeting here in Seoul. And he said the sinking of the Cheonan was a perfect military ambush, as well as a military provocation.

But perhaps an indication of just how little room he has to maneuver here, he says the situation is so grave, any response from South Korea, he said, would be prudent. There's also plans for the president to address the nation on Monday.

To the North, though, Pyongyang continues to threaten war, today warning that it was prepared to tear up all agreements with the South. That's including a landmark non-aggression pact it signed back in 1991, even though it reportedly ripped up that very same agreement at beginning of last year -- Kiran.

ROBERTS: So, John, as these tensions continue to increase, the next stop on the secretary of State's agenda is to go to Beijing, which, arguably, is North Korea's only friend in the region.

What can we expect there?

VAUSE: Yes, John. Yes, the -- the Tokyo stop seems pretty easy for Secretary Clinton. A very different story once she touches down in Beijing. Her trip to Asia was planned long before the South Koreans released this report. But now, the sinking of this ship will probably overshadow all the other issues which were on the agenda.

And if Mrs. Clinton wants the North Koreans to face those international consequences, then she'll need to convince China. That's going to be a hard sell. They've managed to do it before, when the North Koreans set off a nuclear device and they tested a missile. But it's always been a hard sell. Everything that we're hearing out of Beijing over the past 24 hours give every indication that it will be another hard sell again -- John.

ROBERTS: All right. John Vause for us this morning.

John, thanks so much.

And coming up next on the most news in the morning, this is a remarkable story -- diagnosed with cancer, this boy ran away to avoid chemotherapy. A year later, he says he's better. What he credits for his recovery -- we'll tell you the story coming right up.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the most news in the morning.

Twenty-seven minutes past the hour.

We have an update now on the Minnesota couple caught up in a court drama for refusing to treat their son's cancer with chemotherapy. Well, the teenager's father is now facing his own battle with the disease and he also says he has no intention of using chemo.

We also get an update on how the teenager is doing, as well.

Our Jason Carroll talked to the family about their controversial decision.

(BEGIN VIDEOTAPE) JASON CARROLL, CNN CORRESPONDENT: (voice-over): One year ago, 13-year-old Danny Hauser and his mother vanished. They were on the run. They had fled from the threat of court-ordered medical care

UNIDENTIFIED FEMALE: Daniel Hauser has cancer.

UNIDENTIFIED FEMALE: And it puts alternative medicine in the spotlight.

BRIAN WILLIAMS, NBC NIGHTLY NEWS ANCHOR: -- cancer patient told a judge today...

UNIDENTIFIED MALE: The boy forced to undergo chemotherapy.

CARROLL: Doctors had diagnosed the boy with Hodgkins Lymphoma. They said he needed chemotherapy, without it, he could die. In fact, he had one chemo treatment, but his mother believed so strongly it was making him worse, she took Danny into hiding so he could receive alternative care.

A week passed before they finally returned to Minnesota and the court ordered chemo for Danny.

This is Danny today. He's healthy and working on the family's farm again.

DANNY HAUSER: I've got more energy.

CARROLL: Danny has been cancer-free now for four months.

(on camera): Were you made that you had to have the chemotherapy?

D. HAUSER: Yes.

CARROLL: Why is that?

D. HAUSER: Because I was -- they made -- they said it wouldn't do nothing. He said it wouldn't make you sick or nothing.

CARROLL: That's what the doctors told you?

D. HAUSER: And they gave me all these drugs. And it didn't do nothing. And it made it worse.

UNIDENTIFIED FEMALE: -- for you right there.

CARROLL: (voice-over): Danny's parents, Colleen and Anthony, say they feel the same.

C. HAUSER: Well, as my -- for my aspect, everyone knows how I feel about -- about that treatment.

CARROLL: (on camera): Which is what?

C. HAUSER: Which is it's barbaric. It's... CARROLL: So you don't believe in chemotherapy?

C. HAUSER: I do not believe -- I mean it part -- it played a role -- it probably played a little role, but what we've did, with all of the alternative therapies with what we did, definitely played a huge role.

CARROLL: (voice-over): And as for the vanishing act a year ago, Danny's mother says she did it because he got so sick after the first round of chemotherapy.

C. HAUSER: And you're always being pushed by -- by the medical field. You're always being pushed -- you've got to do this. This is the next step. This is next. They don't give you time to think.

So we kind of -- I don't know, did what we had to do.

CARROLL: The Hausers explanation for Danny's recovery, they say a strict diet and natural treatments they gave Danny, like vitamins contained in the shake we saw him drink, are the real reasons he's better. Danny's doctor strongly disagrees.

UNIDENTIFIED MALE: During the time he was off chemo, he was getting all those treatments and the tumor regrew. And it only responded then again when he was placed back on chemotherapy.

CARROLL: And while Danny is healthy now, that question -- what's best, traditional cancer therapy or alternative treatments -- has struck the family once again. Last month, doctors diagnosed Danny's father with an acute form of leukemia.

(on camera): Doctors look at, you know, your form of cancer as being a lot more serious, in some ways.

Does that concern you at all?

ANTHONY HAUSER: Not really, no. I guess to me, cancer is cancer. I realize they consider some more -- more serious than others. But I guess, to me, it -- it's all the same.

CARROLL: (voice-over): Anthony has refused chemotherapy against doctors' wishes and he's trying strict diet and natural treatments. It's a choice Danny supports.

D. HAUSER: I wouldn't let him go the other way.

CARROLL: (on camera): You don't want him to have chemotherapy?

D. HAUSER: No. I know what it's like.

CARROLL: For now, Anthony Hauser says he's going to stay on the farm with his family and continue treating himself with alternative means, based on nutrition. But, he's not ruling out chemotherapy as a last resort -- Kiran, John.

ROBERTS: It's good that he's not ruling it out, because if things didn't go in his favor, you know, he wouldn't have many other resources...

CHETRY: Right, but...

ROBERTS: -- to turn to.

CHETRY: -- I mean, when do you know that it may be too late?

I mean if you don't treat it when you can.

ROBERTS: Let's hope he doesn't let it that go that long.

Wow! What an interesting story.

Thirty-one minutes after the hour.

And that means it's time for this morning's top stories.

The markets are melting down. The Dow down more than 10 percent since last month. That means that we are officially in a correction. And the Senate has passed a sweeping measure that could forever reform the way that Wall Street operates.

CHETRY: Well, the U.S. on alert for another possible terror plot. And intelligence officials telling CNN that the Pakistani Taliban is not giving up on striking the U.S. and is plotting to do so right now. The official says that they're basing this information on things -- little tips that were provided by the accused Times Square bomber and also other strings of intel.

ROBERTS: And more environmental damage from that disaster in the Gulf. Thick coats of crude oil now covering a four mile stretch of beach in Elmer's Island, Louisiana. That's about 70 miles west of the mouth of the Mississippi. It's just on the western side of Grand Isle. BP finally admitting now that the spill is much worse than they had estimated.

CHETRY: Well, was it a sin to try to save a woman's life?

That's the question of a very emotional moral debate that's going on right now.

ROBERTS: It involves a nun who was thrown out of the Catholic Church for approving an abortion for a dying patient.

Our Carol Costello has this A.M. Original.

She's live for us this morning from Washington.

A really, really difficult decision that this woman had to make.

CAROL COSTELLO, CNN CORRESPONDENT: It was an agonizing decision for all involved. A 27-year-old patient at St. Joseph's Hospital & Medical Center in Phoenix, Arizona became gravely ill. She was pregnant. And doctors told her unless she aborted her 11-week-old fetus, she would die. The problem -- she was being treated at the Catholic hospital, where abortions are largely prohibited. It was up to Sister Margaret McBride to make the call. After discussing the matter with the patient's family, the patient herself and doctors, Sister McBride gave the OK to terminate the pregnancy.

The woman survived.

But Sister McBride took some heat. The Catholic Diocese and Bishop Thomas Olmsted automatically excommunicated the nun, banning her from participating in the church. This almost never happens.

Because, said Bishop Olmsted: "An unborn child is not a disease. While medical professionals should certainly try to save a pregnant mother's life, the means by which they do it can never be directly killing her unborn child."

It was an excommunication heard round the world. Many Catholics were confused by this because experts in canon law say that under the church's ethical guidelines, sometimes procedures that could kill the fetus are allowed in order to save the mother's life.

A group called Catholics for Choice -- for obvious reasons -- says Bishop Olmsted's actions are problematic for all Catholic hospitals and their patients.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: But if those medical personnel are going to be intimidated, does that mean that Catholic hospitals are no longer safe places, because it's the bishop who dictates what happens or what doesn't happen, as opposed to the people who actually know what they're doing and can act in the best interests of the woman and her family?

(END VIDEO CLIP)

COSTELLO: Sources tell us Sister McBride has since repented. In other words, she's confessed her sins to a priest and her excommunication has been lifted. But she has been reassigned to St. Joseph's. The hospital stands by her. Doctors stand by her. But the hospital says she will fill another important role at St. Joseph's. Neither Sister McBride nor Bishop Olmsted would appear on camera -- John, Kiran.

CHETRY: All right. Carol Costello for us this morning.

Thank you.

ROBERTS: Well, coming up next on the most news in the morning, a real life Thomas Crowne affair -- priceless works of art stolen from a Paris museum. We'll talk with a former FBI agent about who may have been behind this and how they're going to track the thief down.

(COMMERCIAL BREAK) ROBERTS: Well, at 3:50 in the morning, a thief cut a padlock on a gate, broke a window and was inside the Modern Art Museum in Paris. Police say it took him 15 minutes to steal five masterpieces, including a Picasso and a Matisse.

CHETRY: And the burglar was actually caught on one of the museum's working security cameras. But the problem was the $18 million security system itself was broken since March. It was due for repair and apparently they were waiting on some parts.

Well, what's the latest in the investigation?

Joining us now, Robert Wittman, founder of the FBI's Art Crime Team.

He also wrote a book about this, the upcoming book, "Priceless: How I Went Undercover To Rescue the World's Stolen Treasures."

Thanks for joining us this morning, Robert.

ROBERT WITTMAN, FORMER FBI ART CRIME TEAM FOUNDER: Oh, thank you, Kiran.

Nice -- nice to be here.

CHETRY: So let's talk about this particular one, this latest one, the -- the crime of opportunity or was there something that was planned?

Was it an inside job?

What are some -- what -- what are some of the clues that -- that this person left behind?

WITTMAN: Well, I think there's going to be a lot of forensic evidence. You know, when the police do their investigation -- or are doing their investigation at the museum, you know, the window was broken. That's how the assailant got into the museum. So you want to -- they're going to be checking for blood, any kind of trace evidence of that nature, maybe cloth from tears from his -- his outfit, his -- his -- whatever he was wearing.

I think they'll also be doing a neighborhood canvas to see if anyone saw, you know, a getaway car or if anyone was con -- you know, conducting the surveillance outside.

Those things will all be done. And I know the OCDC, which is the investigative unit who handle art theft in Paris, will be doing a great job.

ROBERTS: OK. OK, Robert, let's -- assuming you're in charge of the investigation here. You're looking over the theft. You're -- you're taking inventory of what was stolen. You've got a Picasso, a Matisse, a Braque, a Modigliani and a Leger. And apparently he knew the value of them, because there were two Modiglianis that were hanging in the same gallery. He took the more expensive one. What does that tell you about the perpetrator here?

WITTMAN: Well, obviously, he had been casing the museum. You know, just recently, a Picasso was sold at auction. It was for 100 -- over $100 -- I think $4 million. So that was a -- a world record for a Picasso. So it's been in the news and obviously this -- these thieves or this thief has been, you know, looking at the museum, seeing what he's interested in. He's done some homework and he's following the news to find out which are the most important and most expensive paintings.

CHETRY: But then where does he go from here, because, I mean it's -- it -- they're so famous, that how do you ever sell them on the black market...

ROBERTS: Right.

CHETRY: -- without getting caught?

WITTMAN: Well, that's the question. You know, from my experience working 20 years as an investigator in this field, I've seen that these paintings go two ways. They're -- they're stolen for one purpose. The first reason is for money, all right?

It's about greed. It's not because these thieves are any type of art lovers, I can guarantee you that. They're not stealing them to have them hanging in their homes. They're stealing them for money.

The second reason they do it -- in France and in Europe -- is because they use them as a sort of get out of jail free card. In other words, they're not just involved -- these people are not just involved in criminal activity involving art theft. They're also doing auto theft, gun running, selling drugs. And, in effect, in the south of France, that area there along the Niece/Marseilles/Riviera coast is basically an entry point for a lot of illicit and crime -- illicit activity and crime in Western Europe.

So they're -- they're doing other things, as well. And they keep these paintings basically in abeyance -- in back. They maintain them and they use them as get out of jail free cards.

ROBERTS: Yes. So it's sort of like if they get nailed on another crime, they say, oh, well, you know what...

WITTMAN: Exactly.

ROBERTS: -- I've give you back these paintings if you let me off on this one. Now...

WITTMAN: Exactly.

ROBERTS: Now you investigated a very famous theft from the Isabella Gardner Museum in Boston, about $500 million was the value in the paintings.

Have those paintings ever resurfaced? How is this case similar?

How might it be different?

And when we talk, also, about who might be out there to buy these paintings, aren't -- aren't there some really wealthy people who might grab one of these in the black market, stick it in a room that only they know about and go down and look at it every day to say, I've got a Picasso. Nobody knows I've got it, but I know I've got it.

WITTMAN: You know, you've been watching "Dr. No" and reading your James Bond, obviously. You know, John, in 20 years of investigation, I've never ran into that.

ROBERTS: No?

WITTMAN: I never saw a -- no, I never saw the collector who would hide their, you know, their famous painting. Now, I saw people who stole. And they were collectors, and they stole smaller pieces. But never these million-dollar art works and the reason for that is twofold.

First of all, to buy that on the black market, generally speaking, thieves are asking for about a 10 percent premium. That's what they want, about 10 percent. That's where they start negotiation. On a $10 million painting, that's $1 million. People who have that type of, you know, financial wherewithal, they're not going to buy stolen paintings.

CHETRY: Right.

WITTMAN: Because if you buy a stolen painting, number one, you can't sell it ever. Number two, you can't show it to anyone. And number three, if you get caught with them, you can go to jail.

CHETRY: So doesn't it just drive you crazy...

WITTMAN: So, if you have...

CHETRY: -- that they had this museum with all of these multi- million dollar works of art and the alarm was broken for a month-and- a-half?

WITTMAN: Well, I mean, you know, the -- the museum industry right now is suffering worldwide because of the downturn in the economy. It's -- it's -- they're working on very tight budgets. And I've seen that happen on -- on a number of occasions, especially in Europe. Because the buildings are so old, it's very difficult to keep good security systems up and operating.

In the United States, we don't have quite as much of that problem because we're a newer country. Our buildings are newer and, you know, it's easier to put these security systems in.

That's one of the things that I do. I work with B. Gambolman (ph), a good insurance company. And we -- we do museum site surveys to try to help museums and protect them from these types of things.

ROBERTS: Robert Wittman, it's great to talk to you.

Robert, again, the author of the new book, "Priceless: How I Went Undercover to Rescue the World's Stolen Treasures."

Great to talk to you this morning.

WITTMAN: Great.

ROBERTS: Thanks so much.

WITTMAN: Hey, thank you.

ROBERTS: All right. And if we ever come across anybody with the secret room, we'll -- we'll be sure to tell the world about it.

CHETRY: Because he says he's never seen it.

ROBERTS: Right.

Jacqui Jeras in for Rob Marciano today. She's got this morning's travel forecast right after the break.

CHETRY: Also coming up in 10 minutes, hail the size of softballs -- no exaggeration this time. Jeanne Moos with the incredible video that's been making the rounds on the Internet.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: oh my goodness.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(WEATHER REPORT)

ROBERTS: This morning's top stories just minutes away now, including toxic sludge covering the shoreline. Now, finally, BP admitting what many experts knew all along, that the oil spill is far worse than they thought. We're live in the Gulf this morning.

CHETRY: There's also new information on a terror threat from the alleged mastermind of the attempted Times Square bombing. The Pakistani Taliban plotting as President Obama looks for a new director of National Intelligence.

ROBERTS: Lance Armstrong's bad day -- a wipeout and a steroids accusation -- we'll talk to the man who literally wrote the book on the seven time Tour de France champion.

Those stories and more, beginning at the top of the hour.

Stay with us.

(COMMERCIAL BREAK)

(WEATHER REPORT)

ROBERTS: This morning's top stories just minutes away now, including toxic sludge

-- that the oil spill is far worse than they thought. We're live in the Gulf this morning.

CHETRY: There's also new information

The Pakistani Taliban plotting as President Obama looks for a new director of National Intelligence.

ROBERTS:

Those stories and more beginning at the top of the hour.

Stay with us.

(COMMERCIAL BREAK)

CHETRY: Well, it's seven minutes until the top of the hour.

Welcome back to the most news in the morning.

Hail storms can end up being like fishing trips -- the stow -- the stones tend to get bigger and bigger as you tell the story.

ROBERTS: Yes, the size is with the telling. But the Oklahoma hail storm the other day needed no exaggeration because the hail stones really were as big as -- well, let's have Jeanne explain.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): They looked like ping-pong balls. It resembled a driving range.

(VIDEO CLIP)

MOOS: It went from bad...

UNIDENTIFIED MALE: Oh, my god.

MOOS: -- to worse.

UNIDENTIFIED FEMALE: Oh, my god! Whooo!

UNIDENTIFIED MALE: Oh, my goodness!

MOOS: And for the totally clueless...

UNIDENTIFIED FEMALE: What is that?

It's hail!

MOOS: It hit the Oklahoma City area for less than half an hour, but it left a deep impression.

UNIDENTIFIED FEMALE: In the house, our kitchen window is broken. It's in my room.

MOOS (on camera): We always hear that old cliche about hail the size of golf balls. Well, this hailstorm made that cliche seem like an understatement. It left one runner running for his life.

(Voice-over): Tim Hartmore got caught in the storm as he was out running. Look what the hail did to his back.

TIM HARTMORE, HIT BY HAIL: It was just ridiculous. I was pretty much just running for my life.

MOOS (voice-over): He managed to flag down a passing vehicle and get in it. But being in a car was no picnic either.

UNIDENTIFIED MALE: Holy (EXPLETIVE DELETED). My car is going to be toast.

MOOS: Many were.

UNIDENTIFIED MALE: Ungodly.

UNIDENTIFIED FEMALE: Insurance companies hate Oklahoma.

MOOS: Most of these are home videos with titles like "Hail of a Storm, "Hailstorm from Hell," "Holy Hailstorm."

UNIDENTIFIED MALE: Awesome.

MOOS: This woman ventured out to scoop up some hail with a can on her head. She came back with hail the size of eggs. Size seemed to matter.

UNIDENTIFIED FEMALE: Pit is holding some balls.

UNIDENTIFIED MALE: Is it baseball or golf ball?

UNIDENTIFIED MALE: It sounds like baseball-sized hail.

UNIDENTIFIED MALE: It's more like a softball or a bowling ball.

UNIDENTIFIED MALE: And these are some big ass hail.

MOOS: Big enough to shred trees. Big enough to shred sidings.

UNIDENTIFIED MALE: Look at the siding over there.

MOOS: Packing a punch so loud -- it paid to put your hands over your ears at this glass-ceiling mall.

(on camera): It's possible a world record has been broken for the number of times someone says "oh, my god" in a minute 20 home video.

UNIDENTIFIED FEMALE: Oh, my god. It's hitting the windows. Help. Oh, my god. Oh, my god. Oh, my god. Oh, my god.

UNIDENTIFIED MALE: What?

UNIDENTIFIED FEMALE: windows are breaking. Oh, my God, the kitchen windows.

UNIDENTIFIED MALE: Quick. Calm down, mommy.

MOOS (voice-over): We counted mommy saying it 15 times. All hail to the storm.

Jeanne Moos, CNN...

UNIDENTIFIED FEMALE: Oh, my god.

MOOS: -- New York.

(END VIDEO TAPE)

CHETRY: Wow! That one lady said if those insurance companies hate Oklahoma.

ROBERTS: I thought the other woman said it pretty well, too -- oh my god. Oh, my god. Oh, my god.

Four minutes to the top of the hour. The top stories coming your way right after the break.

Stay with us.

(COMMERCIAL BREAK)

CHETRY: Good Friday morning to you.

Glad you're with us on this AMERICAN MORNING.

It's May 21st.

I'm Kiran Chetry.

ROBERTS: Good morning to you.

I'm John Roberts.

Thanks so much for being with us today.

Here are the big stories we'll be telling you about coming up in the next 15 minutes.

Markets around the world melting down. The euro is plunging; with it, a lot of 401(k)s. We are now officially in a correction and with the bears emerging from hibernation, the pain may not be over.

CHETRY: Also, thick, syrupy crude oil now covering beaches on the Louisiana coast. A four mile stretch of shore badly stained by the spill. And some locals say that no one saw it coming. Meanwhile, an admission from BP. The oil giant finally confirming what many experts have been saying all along -- that this spill is much worse than they thought.

ROBERTS: Plus, Lance Armstrong crashes out of an eight day race in California and is again accused of doping, all in just a few hours. The claims this time coming from his former teammate, Floyd Landis. We're going to break down the allegations with the author of "Tour de Lance," "Bicycling" magazine's Bill Strickland.

CHETRY: Well, it is the market correction of 2010 -- the euro plummeting, 401(k)s everywhere shrinking and the stock market is now officially in a correction, surrendering 10 percent of its value since last month. The meltdown also marching on overseas, as well. Japan's Nikkei down 245 points overnight. China's Hang Seng (AUDIO GAP). And in London, the FTSE down again this morning, surrendering 13 percent of its worth since mid-April.

ROBERTS: And the only thing certain this morning, Wall Street reform is one step closer to becoming a reality. Late last night, the Senate passed a sweeping overhaul of the nation's financial system. Four Republicans actually voted for the Democratic measure.

Our Christine Romans here minding your business this morning.

The president's got to be pleased with the vote.

So what happens next?

ROMANS: So what happens next is now they've got to put these two together, the Senate and the House versions. And they've got to come up with what is actually going to be the once in a generation regulatory reform of Wall Street. Wall Street bracing for absolutely sweeping changes for how it does business. It means sweeping changes for how your money -- you handle your money and what happens to your money.

Why?

Because there are a lot of consumer angles to this. Among them, there will now be on regulator and laws to curb unfair loans, credit cards, some -- a lot of the things that created so much of the -- the risky atmosphere and really trapped a lot of consumers. Those things are going to be tracked and prevented.

There will be more disclosures and simpler paperwork. The mortgage document that you sign a year from today will be vastly different than any mortgage document you have ever signed before. It's going to be simple, clear and understandable. There are also going to be new rules to help you save money. There will be fewer hidden fees and one overall regulator for consumers. A big part of the crash -- the big part of the reason why so many people got loans that were not good for them or got trapped into credit card agreements that weren't right for them or all different kinds of consumer credit situations that really hurt them was because there was no one person who was looking over all of this or one regulator who was making sure that people weren't being taking advantage of. And that's what this will be.

Also, there will be a council of -- of regulators to make sure that if there's a big company, like AIG or Bear Stearns or Lehman Brothers or any of these others that could hurt the overall economy and the global system, there's going to be a mechanism now to go in there and take apart that company before it costs you and your taxpayer money at the end.

So this is what the goal is of regulatory reform. No surprise, you guys, that many on Wall Street are nervous about it. They're worried about the uneven regulatory reform and how -- how hard it's going to be to try to -- to try to -- to actually implement this. And that's something that they're grumbling about on the Street and -- and in the banks. But it looks like it's going to be law.

ROBERTS: Yes.

CHETRY: But if it -- that's not all of what's behind this, is it?

It's mostly the fears in Europe and what's been going on in the -- in Europe.

ROMANS: You mean in the stock market?

CHETRY: Just the -- the correction and -- and the down days that we've seen and the jitters.

ROMANS: It's altogether. There are a lot of different things moving together. And it's interesting, "The Financial Times" is playing the regulatory reform moves as a major reason for the sell-off yesterday. Others are telling me that the regulatory -- we -- we knew that they were all coming.

CHETRY: Right.

ROMANS: You know, it's not exactly like it's...

(CROSSTALK)

ROBERTS: It wasn't a surprise, yes.

ROMANS: That just feeds into an overall uncertainty. Every market is -- is wild swings -- emerging markets, oil, dollar, euro. Everything is interconnected, everything is moving very wildly. It's still a kind of a treacherous time out there.

ROBERTS: Yes. The Dow futures were up earlier, now they're down.

ROMANS: Yes.

ROBERTS: So we'll see which way it goes.

ROMANS: It -- it could be a wild day. I'm -- I'm going to be really interested to see whether -- whether we have a repeat of yesterday or whether we find some...

ROBERTS: Right.

OK. Christine, thanks.