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American Morning
Journalists Detained in Libya; Senator John Ensign Quits Senate; Obama's Cross-Country Campaign; McCain to Campaign for Trump?; Sanitizers versus Germs; Blasting "Blast"; Amazon Glitch Takes Down Sites; Tracking Your Every Move; Inside the "Hot Zone"; McCain Meets Rebels in Benghazi; Obama Heckled by Singing Woman; Apple Under Fire; State of the Housing Market
Aired April 22, 2011 - 06:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CNN ANCHOR: Senator John McCain on the ground in Libya, making a surprise visit overnight to the rebels' home base. This as the United States approved using predator drones over the country -- on this AMERICAN MORNING.
(MUSIC)
VELSHI: Good morning. It's Friday, April 27 -- 22nd. I'm little few days ahead. It is Good Friday, however.
Welcome to AMERICAN MORNING. I'm Ali Velshi.
KIRAN CHETRY, CNN ANCHOR: And I'm Kiran Chetry. Christine Romans is off today.
Ahead this hour:
Cringing at the pump -- if you've taken a look at prices lately, you know, they're pretty much eating into your life here. The president wants to step in. Will his task force, though, be able to do anything about the rising prices?
VELSHI: Also ahead, it's a story we've been talking about all morning -- iPhones and iPads tracking your every move. We'll show you how the program works and how you can stop it.
CHETRY: We begin, though, in Libya where new NATO airstrikes are taking place, targeting Gadhafi forces overnight in the Libyan city of Sirte. Now, "Reuters" is reporting nine deaths in the NATO bombing.
And also developing overnight, the U.S. Joint Chiefs chairman, Admiral Mike Mullen, says coalition airstrikes have damaged 30 percent to 40 percent of Gadhafi's main ground forces. Despite that, Mullen says that the battle in Libya appears to be headed for a stalemate.
VELSHI: Meantime Senator John McCain in the rebel stronghold of Benghazi this morning. McCain arrived there overnight to meet leaders of the Libyan opposition. The Arizona senator has been a strong supporter of using military force to remove Moammar Gadhafi from power.
CHETRY: Libyan rebels are getting help from the U.S. in the form of armed predator drones. The unmanned planes have been used in Afghanistan and Pakistan. Defense Chief Robert Gates was asked about the president approving their use against Gadhafi troops in Libya. Here's what he said.
(BEGIN VIDEO CLIP)
ROBERT GATES, U.S. DEFENSE SECRETARY: Now the president has said that where we have some unique capabilities, he is willing to use those and, in fact, he has approved the use of armed predators. And I think that today may, in fact, have been their first mission. So I think that will give us some precision capability.
(END VIDEO CLIP)
VELSHI: We're going to talk about more of those predators in a moment. Let's get to Fred Pleitgren in Tripoli for us. Fred, let's start with John McCain's trip to Benghazi to meet with those rebel forces. What does it mean? What's the context?
FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Well, it means a lot, obviously, to the rebel forces but it also shows that the U.S. is sort of feeling out and seeing what they rebels are all about, more than they have been before. This is obviously a very important visit to the rebels. Senator McCain coming in there, because they feel he's a strong supporter of theirs, as you said, he was saying that he wanted a more stepped up military campaign.
He in the past, of course, has also said -- the U.S. should be in it for he was received in Benghazi. When he came there, they went to Freedom Square -- which is the center of Benghazi to help the rebels at this point in time. He's in a couple meetings with the leadership of the transitional national council, feeling out how America can help them, what America can do. Of course everything at this point short of putting any boots on the ground, Ali.
VELSHI: Fred Pleitgren live for us in Libya, thanks very much on that story. We'll continue to follow it.
A story on everyone's mind right now, gas prices. By the way, it's something you see and feel regardless of whether you drive because the price of oil is what drives it, and the price of oil has a lot to do with everything. The price of gas has to do with everything you buy from stores because it gets delivered by a truck. This morning gas prices up for the 31st day in a row.
CHETRY: Yes. According to AAA the national average is $3.85 a gallon. Many people will notice it's higher than that, pushing above $4 for many parts of the country. Now President Obama is on a mission to crack down on one group that he says could contribute to higher prices, traders, speculators.
(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The attorney general is putting together a team whose job it is to root out any cases of fraud or manipulation in the oil markets that might affect gas prices. And that includes the role of traders and speculators. We are going to make sure that nobody is taking advantage of American consumers for their own short-term gain.
(END VIDEO CLIP)
CHETRY: Already gas prices have some Americans rethinking their vacation plans. There is evidence coming in from companies who rely on tourism. At the Grand Canyon, they're seeing a 10 percent drop in visits there, in Mount Rushmore, 6,000 fewer visitors in March.
VELSHI: Let's bring in Stephanie Elam. She is "Minding your Business." What do you think?
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: I think it's a tall order to ask people to go ahead and find a way to figure out who's speculating and doing what. So much data, so many movements it's really, really hard to do. I think while the best intentions, you know, what they say about that, not necessarily going to be an easy thing to do. And there's been so many people who have tried to take this on before and nothing comes of it.
Let's take a look at what the issues are right now. If you take a look at it, high demand, although right now we're starting to see the global consumption is contracting a bit. And so because of that you're having some countries like Saudi Arabia, which is actually cut down its production because of the weaker demand, OPEC even going ahead and downgrading its forecast for global oil consumption.
But these oil prices at over two-year highs right now. That has people afraid about what this means. You have the unrest in the Middle East. That's all in there as well. So people are saying this is going to keep causing oil prices to go up, so that's the speculators coming in and pushing the prices up.
Not necessarily what anyone here wants to hear about, but this is obviously something that's going on, and we're probably going to hear more of that. But finding somebody to say we've pointed out -- this attorney general can say this is what's going on, it's going to be a tall order.
VELSHI: I get a lot of tweets about this, about speculation should be banned. I remind people that without speculation we would have no markets in anything. You would never sell your house for a profit if there wasn't somebody speculating it's going to be worth more.
ELAM: They talk about it more when it comes to oil prices and that's what gets people going. But you're right, it's a part of the whole market system as to how it works.
VELSHI: And can make it bad and damage the market. But this whole concept that all speculation is bad, I'm not sure the president helps the situation by shining a light on it without saying there's a reasonable amount of speculation that it's necessary in a free market. If you don't want speculation you have a government economy.
CHETRY: And the bully pulpit is inundated with people saying this is affecting my life, the president saying, I hear what you're saying, but can they do anything about it?
VELSHI: I think it does a disservice. All that happens, we get heated up, about speculators doing this and speculators should be banned. It would hurt America a great deal if speculation were banned. It would be better if politicians were more responsible in the way they spoke about this.
ELAM: Do you know what happened at the markets? It was a good day, how about that, three in a row now we've had good numbers. It's earnings season, earnings numbers coming in strong. We still got readings on the economic side not as cheery as we would like them to be. Nevertheless, the Dow up 12,506, NASDAQ better suit, S&P following suit.
There will be no market action today in case you were looking for that because you had nothing else going on today, there will be nothing. The markets closed for Good Friday. So nothing today.
VELSHI: Good to see you, Stephanie.
ELAM: Good to see you too into thank you.
CHETRY: Florida pastor Terry Jones, he burned the Koran, threatened to do it, then said he wouldn't, then he when ahead and did it. And then it triggered deadly riots overseas. Today he's gearing up for a protest at a mosque in Michigan, wanting to hold it at the Islamic center of America in Dearborn, Michigan, where a third of the population is Muslim, one of the largest Muslim communities in America.
A jury will decide whether he is allowed to do that this morning. We spoke with Dearborn mayor Jack O'Reilly this morning who says it's just not the right place.
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MAYOR JACK O'REILLY JR., DEARBORN, MICHIGAN: To have an event where it can support it. If all of a sudden a thousand people showed up in front of the building you're in and they stood on the public sidewalk in front of the building and wanted to give voice to their concerns, they would be obstructing access, they would be obstructing, may spill over into the roadway and they present a danger. And that's what we're talking about here. The site he selected is all private property.
(END VIDEO CLIP)
CHETRY: It's interesting. There have been religious leaders as you see gathering to show their support for the Muslim community to show their unity. In fact, the imam of that mosque saying this man does not speak for Christians. He speaks for himself only.
VELSHI: Speaking of Donald Trump yesterday, he speaking to other people as well. He spoke to Megan McCain, John McCain's daughter, soliciting a little advice from her. They're going to team up.
CHETRY: Also, we want to read your responses to this iPhone tracking story, iPhone tracking all your locations, storing it on your desk top when you sync. A lot of people are wondering why, including Congress. Stephanie Elam will be back to talk about this. It's eight minutes past the hour.
(COMMERCIAL BREAK)
CHETRY: We're getting our first word this morning about three journalists who have been detained in Libya for more than two weeks now. Clare Gillis was covering the conflict for the Atlantic and "USA Today." She was finally allowed to call home yesterday. She's being held in Libyan jail and her parents are told she's doing well. She also said that the two others being held, reporter James Foley and also Spanish photographer Manuel Brabo were in good health before they were separated.
Joining us now from Boston James Foley's parents, John and Diane Foley, and in Washington, Robert and Jane Gillis, parents of Clare Gillis. I want to thank both sets of parents for joining us this morning. I know it's an extremely trying time as you await word of your loved ones. Thanks for being with us.
JANE GILLIS, MOTHER OF CAPTURED JOURNALIST: Thank you.
JOHN FOLEY, FATHER OF CAPTURED JOURNALIST: Thank you for having me.
CHETRY: I want to start with you, Jane. You had a chance to talk to Clare yesterday. What was it like to hear her voice and how is she doing?
JANE GILLIS: It was tremendously happy. I was so happy to hear her voice, and she said that she was well. Her major concern was that she had caused us worry. That is what she's been worried about for the past two weeks. We were ecstatic, but realized this is a first step towards getting her and James released.
CHETRY: I understand. I mean I can understand you describe it as being ecstatic, got to hear from her. Diane and John, you were unable to speak to James. You have not had any direct contact. But do you have any word from anyone on how he is doing?
DIANE FOLEY, MOTHER OF CAPTURED JOURNALIST: No.
JOHN FOLEY: Actually, Clare is our best source. She indicated the last time she saw him he was in reasonably good shape. This was the 19th. That's very encouraging. We had no reports specifically about Jim prior to that.
CHETRY: And the other thing, Diane, we heard from Secretary of State Hillary Clinton. She actually spoke out on behalf of all three being held and said, you know, the time is to release them. They're being held unfairly. Do you know how much contact our state department or diplomats have had in trying to secure the release?
DIANE FOLEY: I think our state department has been working very hard. Our senators from both our state of New Hampshire, Massachusetts, and I'm sure Connecticut, have all been working towards this end. But it's very difficult, as you said, Kiran, because we don't have diplomatic relations with Libya.
CHETRY: As I understand, it has to go through -- it has to go through Turkey, right? They're involved as well. As I understand it, you have heard some encouraging news, but there's been no exact timetable given.
JOHN FOLEY: We actually haven't heard any timeline. Everybody seems to be encouraged that they will be released, but we have no idea when.
CHETRY: And Robert, from what you gather, do you know any details about how -- I mean there are a lot of western journalists in Libya covering this story, trying to keep themselves as safe as they possibly can in a dangerous war zone. Do we know how Jim, Clare and Manuel ended up getting detained?
ROBERT GILLIS, FATHER OF CAPTURED JOURNALIST: We know some basic details of it. From what I can speculate, I think that they had left Benghazi early in the day, April 5th, and probably intended to get back to Benghazi before the day was out. That's simply a guess on our part.
But they were proceeding on a road toward Brega, and there was apparently some crossfire between the loyalist forces and the rebels which they inadvertently found themselves in. And from what we can gather, I think they exited the vehicle that they were in and tried to seek cover and some location, probably near the side of the road.
And they were spotted by either, you know, police, militia, army, I'm not sure which, but whatever they were loyalists people. And they were taken into custody, detained. The driver of the vehicle was apparently a Libyan and he was basically directed just to get out of the area as soon as possible. And then they fired on the vehicle and blew it up. And then the three journalists were scooped up and taken, I believe first to Sirte, and then they were moved to Tripoli.
So that's about the extent -- that's all that we know in terms of the details. We did not discuss anything about the actual capture with Clare when we spoke to her yesterday on the telephone.
CHETRY: All right. I'm sure -- yes. I understand. I mean, it's probably -- everything she says is being monitored, I'm sure, that point.
And I want to ask this to Diane. You said that Jim's been to Afghanistan. He's been to Iraq. He's earned his stripes in the war zones, but he's indicated to you that Libya was different. Why? DIANE FOLEY, MOTHER OF JOURNALIST DETAINED IN LIBYA: Well, because he really went, you know, entirely on his own. And really didn't know anyone in Libya, so that made it very different.
But I think he found quite a camaraderie and group of journalists in Benghazi and apparently, they knew each other fairly well. I was very thankful he was travelling with Clare and with Manuel and Anton. But that made it very different because it was, of course, more dangerous.
CHETRY: And Jane, you indicated, you know, Clare's concern was for you guys, so sorry you had to wonder where she was for so long. As a mother, what is it like, you know, knowing that your daughter is in harm's way and that you don't know when she's going to be released?
UNIDENTIFIED FEMALE: It's indescribable. It's just living minute to minute, trying to figure out the best thing to do on this end, which we're very limited on what we can do. And I think that that's -- everyone feels frustrated as to how to help.
CHETRY: Right. We want to let people know, you guys did put up a Facebook page. It's facebook.com/freegillis that's for information about everybody, links to your homepages. We're going to put that up as well on our sites.
UNIDENTIFIED FEMALE: Thank you.
CHETRY: Hopefully that will help in some way and hopefully you guys will hear news soon.
UNIDENTIFIED FEMALE: Kiran.
CHETRY: Yes.
UNIDENTIFIED FEMALE: Kiran? There's also a freefoley.org page that has that and a petition for Clare and Jim's release.
CHETRY: Freefoley.org is also the other one. We're going to make sure that we link both of these up with all of our social networking apparatus here and we sincerely wish you guys the best, Robert and Jane Gillis, John and Diane Foley, good luck.
UNIDENTIFIED MALE: Thank you very much.
UNIDENTIFIED FEMALE: Appreciate it.
CHETRY: Absolutely.
UNIDENTIFIED FEMALE: Thank you.
VELSHI: All right. We are going to continue to follow their situations in Libya, those missing journalists. Also we've been telling you about what's going on in the hot zone in Japan, the area most affected by the nuclear fallout.
When we come back, Stan Grant is going to show us what it looks like, what life is like, that life, which is still happening in that area.
CHETRY: Also, hand sanitizer, the FDA now wants some makers to change the labeling. Why? We're going to find out. It's 18 minutes past the hour.
(COMMERCIAL BREAK)
VELSHI: He's caught in the middle of a sex scandal and Nevada Senator John Ensign is calling it quits. His term ends in 2012, but he says he's stepping down May 3rd.
(BEGIN VIDEO CLIP)
VELSHI (voice-over): The Republican in the middle of an ethics investigation, admitted to having an affair of his former chief of staff's wife. Investigators are looking into allegations that he paid her family nearly $100,000.
President Obama's fund-raising and talking about cost cutting out west. He stopped in Reno, Nevada, yesterday for his third town hall in two days. The president called for an end to subsidies for oil companies and tax cuts to the wealthy. The president also hosted a series of fund-raisers. Democratic sources tell CNN that supporters paid over $35,000 for dinner with the president.
Donald Trump says you're hired to Megan McCain. He sat down with her for an interview yesterday for "The Daily Beast." McCain asked Trump whether he would hire her for his presidential campaign. Trump said he loved the idea, may be hoping to follow the footsteps of Megan McCain's father John McCain who won the Republican nomination in 2008.
For all the latest political news at home or at work go to cnn.com/ticker.
(END VIDEO CLIP)
CHETRY: So is it hypothetical or does she want to work for Trump?
VELSHI: It's unclear whether that was really -- would you hire me?
CHETRY: Yes.
VELSHI: You know, yes.
CHETRY: All right, well, checking what's new this morning, you can't believe everything you read. It turns out that hand sanitizers don't fight of 99.9 percent of bacteria that they often advertise.
(BEGIN VIDEO CLIP)
CHETRY (voice-over): In fact, the FDA is warning four companies to remove those claims, saying they're false, that hand sanitizers don't kill germs like MRSA, which is the flesh-eating bacteria, E. Coli, salmonella and the H1N1, virus or swine flu. The best way to protect yourself, they say, is old-fashioned soap and water.
VELSHI (voice-over): I'm a soap and water guy.
CHETRY: Yes.
(END VIDEO CLIP)
VELSHI: Lawmakers blasting blast, 17 state attorney general petitioned Pabst Brewing Company.
(BEGIN VIDEO CLIP)
VELSHI (voice-over): The maker of Colt 45 Blast that you see there to halt production of the malt beverage, calling it a binge in a can, saying it targets kids. Blast is a fruity drink with a colorful design as you can see. It contains 12 percent alcohol by volume. Pabst stands by their product saying they only market to people above the legal drinking age.
CHETRY (voice-over): Well, you couldn't get on your favorite web site yesterday, maybe you want to blame Amazon. A technical glitch on amazon.com's servers caused major web sites to either crash or slowdown. Sites like Four Square, Redit, Amazon rents out space on its computer servers. Most sites were back up within 12 hours, but some are still running a little bit slow.
(END VIDEO CLIP)
VELSHI: All right, and Apple, this thing has been a hot topic for the last few days. Are Apple products, iPhones, iPads, tracking your every move?
We're going to tell you how the program works, how to turn it off, and how big a deal it is. We're also going to read some of your comments that you've been sending us about your feelings on the matter.
(COMMERCIAL BREAK)
CHETRY: Well, authorities in Japan are strictly enforcing this evacuation zone. It's actually getting wider around the crippled Fukushima Daiichi nuclear plant.
VELSHI: Some people that want to go back.
CHETRY: That's right because there are some people that when they try to go back to their homes, get documents. I mean, they had to leave and left most of their life behind.
Well, now, the new order, it's designed to keep people from sneaking back, as they're calling it, sneaking back into their homes to retrieve their belongings.
VELSHI: CNN's Stan Grant returned from an exclusive visit into what he's calling the hot zone. What he found was a virtual no man's land, abandoned houses, destroyed homes, little or few signs of life. He joins us now live from Tokyo outside that hot zone. Stan, what was it like?
STAN GRANT, CNN CORRESPONDENT: Yes, really extraordinary, a very eerie experience, Ali. You know, going in there we only thought we would only get as far as the 20-kilometer limit. When you arrive there are flashing red lights.
(BEGIN VIDEO CLIP)
GRANT: You immediately see guards there wearing facial masks and so on. We actually saw some people going in, in full protective body suits. When we got there we found that the radiation levels were relatively low and, in fact, the police at the checkpoint said look, do you want to come in and have a look?
We had our own reading of the situation. We protected ourselves with mask and protective gear on our feet and so on. We did go in. What we found was a scene of desolation, really. There were houses that were very badly damaged by the tsunami, very, very few signs of anyone going in or out.
There were some cars going back and forth, but very, very few people walking around. We did find one man. He told me his family had lived there for 150 years, generations, but now, as a young man, he fears he will never go back.
He was just going back in to retrieve some possessions. A real sense of concern about just how bad this nuclear crisis is and exactly what to believe, Ali.
(END VIDEO CLIP)
CHETRY: Yes. The other question is, have they expanded this hot zone? Have more areas sort of been swallowed up in what they're considering unsafe?
GRANT: Yes. That's a really good question there, Kiran, because you have the 20-kilometer limit and then a wide of 30-kilometer limit, 20 miles or so there. And interestingly enough, we actually found higher radiation readings in some of those areas outside that exclusion zone than actually inside it, which also goes to show just how unpredictable this situation is.
Now the people outside in the wider zone have been told to prepare for evacuation in the eventuality they have to leave their homes as well, but ultimately people want to go back. People want to go back and get their lives in order. At the moment they don't know where their future lies.
We actually saw the head of the president of TEPCO, Tokyo Electric Power Company, that runs the Fukushima plant, visiting displaced residents and bowing in front of them and begging forgiveness as one man said to him.
You don't really want to hear forgiveness. We want to know when we can go back and get our lives together. That's the big question now. No one really knows when that will happen. VELSHI: All right, Stan, thanks very much for that report. Stan Grant for us in Tokyo.
Your top stories now. Arizona Senator John McCain showing his support for the Libyan rebels in person.
(BEGIN VIDEO CLIP)
VELSHI (voice-over): McCain arrived in Benghazi overnight on a surprise visit. He was greeted with cheers and people waving American flags. McCain says the rebels tried to overthrow Moammar Gadhafi are his heroes.
The president heckled by a singing woman at fundraiser in California. The singing protester wore a shirt supporting Wikileaks suspect Bradley Manning. The president left the heckler finish before she was thrown out.
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CHETRY: Sounded like way more than one woman singing, didn't it?
VELSHI: It sounded like people joining in on that. Yes.
President Obama says he feels your pain at the pump, by the way. He's announced a new task force which he claims will root out any cases of fraud and manipulation in the oil and gas market. The national average for a gallon of regular gas now $3.85.
CHETRY: All right. Well, we're talking about privacy concerns. Apple's iPhone and iPads apparently tracking your every move. What has some people upset about it, it's a mixed reaction, a lot of people don't like the fact, Stephanie, that this was not disclosed.
STEPHANIE ELAM, CNN BUSINESS NEWS CORRESPONDENT: Yes, some people are like why is this sneaky little thing on there, and other people are like, "look at where I've been!" So you have like the whole gamut of how people feel about it. But we're talking about - we've been talking about it for days, right?
VELSHI: Yes.
ELAM: Because how many of us have iPhones?
(CROSSTALK)
VELSHI: I have an iPad.
CHETRY: And an iPad.
ELAM: Do you have 3G?
VELSHI: I don't have my location stuff activated.
CHETRY: I do.
ELAM: Your stuff is not activated.
ELAM: Now, we know what's going on with you today.
VELSHI: That's it.
ELAM: Yours is. Mine is. You know, it knows where I've been. When I get on my computer I'm actually going to do this. But what it is is your iPhone 4, your iPad, if you have 3G, it's been keeping track of everywhere you've been since June. And so now these fine folks who are really, really smart and know how to go into your phone and figure things out, they put together the iPhone tracker app and you can just download it and see all the places that you've been.
Most folks not too worried but they still think that Apple needs to give an explanation. We haven't heard anything. But take a look this little dot. Follow along as someone rides along, maybe taking the train from D.C. up to New York. Every time their little phone is syncing with a tower, that's where the dot is coming in. I used to do that a lot because I went to school in D.C. and then moved up here. So this is a route I know really well and this is a lot of what people would be doing, if you do a map you follow that. Maybe if you fly between Atlanta and New York and then L.A. and New York, all of these things would pop up on there. Maybe if you had a stopover you would see that on there as well.
Apple has not said why they're keeping this data on your phone and then it syncs with iTunes on to your computer. No word on that yet. Some people thinking maybe it has to do with the fact that they're planning on having ads based on where you are. Remember, what was that movie with Tom Cruise? You walk in.
VELSHI: "Minority Report."
ELAM: "Minority Report." Nicely done. You are here today with us, good. It was in that movie, remember he walks into Gavin, he was like "Well, hello, are you interested in another pair of jeans?"
(CROSSTALK)
CHETRY: Time is not that far off.
ELAM: No. And that's some of the guessing on why it's there. But a lot of people feel like, you need to know why it's there. Now, you can turn it off. Your location tracker, you can go into your settings, turn it off, and say this. Here's the thing. Let's say you want to go into your map and say I would like to find Target.
VELSHI: Yes.
ELAM: You want to find the closest Target to where you are. It's not going to be able to do that but it will still go and pull up and you say you want to look up the city of Duluth, it still will go into the map and -
VELSHI: In the old days before we had GPS stuff you could put an address into a mapping software and it could tell you where the closest one was. If you knew where you are without the device sensing where you are, you can tell it where you are.
CHETRY: We got some reaction from people. Lace man 42, "it's crazy how big brother has to watch you do everything. Glad I don't have an iPhone." Someone else wrote in and said they actually turned their iPhone in yesterday upon finding this out. And then some people were joking about, "as long as it doesn't track my room number I'm OK with it."
ELAM: Yes, right. Exactly. Well, here's the thing-
CHETRY: But there are some legal questions. Can this be used in criminal cases, custody cases?
ELAM: It's not going anywhere. It's not leaving your phone or your computer. It's not being sent anywhere.
VELSHI: For now!
ELAM: But that's what people have a fear of.
CHETRY: Encrypted. So if you lose your device -
ELAM: You can encrypt your data on your computer and you can make that call yourself. You don't have to go (INAUDIBLE) your phone. If you're worried about this.
CHETRY: If you knew it was there you didn't know it was there now security folks found it.
ELAM: If you're doing something shady -
(CROSSTALK)
VELSHI: I lost my GPS the other day, I didn't lose it, somebody stole it. And there's no encryption on that. And so somebody can sit there and look at everything, everywhere I've gone and create some sort of ability not just -
CHETRY: To find out where you live.
VELSHI: It's not just - I mean, I agree with you. If you're not doing anything shady you shouldn't be worried except that somebody will know exactly where you're traveling.
ELAM: Well, they do know where you're traveling and I guess they can follow your dot back to like, OK, the closest tower that he's going to is his home. That could be an issue for you too. The main thing is, if this is a concern for you, you need to encrypt it on your phone.
CHETRY: We are still waiting to hear back from Apple. I understand that two members of Congress trying to figure out what they intend to do with it.
VELSHI: All right. Stephanie, thank you.
ELAM: See you in a bit.
CHETRY: We want to know what you think. Go to our blog cnn.com/am, our twitter page @cnnam, or facebook.com/americanmorning. There you go. And then we'll read your comments coming up in the next hour as well.
VELSHI: Excellent: We're going to talk about the housing market, time to buy or time to sell? You've been hearing both of those, or time to do nothing. Mortgage rates still low. We've got the secretary of Housing and Urban Development, coming up next.
(COMMERCIAL BREAK)
CHETRY: Pretty picture this morning of Washington, D.C., where right now it is 46 degrees, mostly cloudy. A little later, 51 degrees and showers, but as we heard from Jacqui Jeras a little earlier, it's going to be sunny for the bunny as she put it.
VELSHI: Sunny for the bunny. I like that.
CHETRY: Hopefully everything will go OK with the Easter egg rolls and all the fun things people are going to be doing on Easter Sunday and Monday.
VELSHI: I'm trying to figure out my -
CHETRY: I see that you're having a little bit of trouble with the new -
VELSHI: I've got the Playbook. This is the new Blackberry Playbook. We're going to talk about this. It's one of the like one of the 70 different tablet computers coming out this week.
CHETRY: To compete with the iPad.
VELSHI: All I've managed to do is pull the calculator up.
CHETRY: Congratulations.
VELSHI: Yes.
CHETRY: What are you adding up right now?
VELSHI: Mario Armstrong is going to be here a little later on. He's going to tell us about this whole thing. Meanwhile, you and I are going to have to figure out how to do more with it.
CHETRY: Well, the one thing we do know.
VELSHI: Look at how it compares in size.
CHETRY: It's a lot smaller than the iPad. That may be its only advantage, we're going to see. I'm teasing you.
VELSHI: Well, I just don't know how to use it yet. I'm figuring it out. All right. Listen, let's talk about housing for a second. CHETRY: Let's do that.
VELSHI: You know, when you think about the economy what's most important right now? Jobs are probably the most important thing.
CHETRY: Jobs and then your biggest investment, which is your home.
VELSHI: Generally speaking, your home. A few months ago there seemed to be this general broad consensus that as a national average, the housing market was coming back. Prices and interest rates both very low. Let's just take a look at prices for the - what we call the existing single-family home. That's a regular used home as opposed to a new home.
Going back to 2005, see how those numbers peaked in 2006 and then in 2007, they were still pretty high but they started to weaken and look at that plunge in 2008. 2009 we saw some stability, 2010, but then it dropped again. Now beginning of 2011, Kiran, if you were a betting person, that would look like the bottom of the market to you. You would think it's a logical time to buy with those low interest rates.
"Fortune's" cover story a few weeks ago called it "the return of real estate." But now there's some concern that there could be a double dip in the real estate market and with inflation rearing its head, are those interest rates ready to go up, 4.8 percent right now for a 30-year fixed mortgage. Yesterday I spoke to Shaun Donovan, the secretary of Housing and Urban Development and I asked him if he thinks this is a good time for people to buy.
(BEGIN VIDEOTAPE)
SHAUN DONOVAN, HOUSING AND URBAN DEVELOPMENT SECRETARY: No question that for those who can put together the down payment, today is a good time to buy. In fact, we've seen six out of the last eight months, home sales rising. But, it's a fragile recovery and what you can see is that after declining for 30 straight months, before the president came into office, we've seen prices stabilize, but we haven't seen a consistent upward trend that makes me confident yet. I think this spring is really going to be a time where we're going to be watching closely.
VELSHI: Look we got this whole discussion going on right now about smaller government and one of the things that the government is so heavily involved in is the backing of new loans or mortgages. Some say nine out of 10 new mortgages are in some fashion backed by Fannie Mae and Freddie Mac or the Federal Housing Administration.
You're one of those people who thinks the government should have a smaller role in this as we go forward. But isn't that going to make it harder for people to get mortgages?
DONOVAN: Look, Congress set up FHA, which is part of my agency at HUD, just for this kind of moment. When we're in crisis, housing is too important to not have credit available. It helps folks move to new jobs, it makes sure families are stable, and so we've stepped up. 40 percent of all home purchases last year were FHA. We've played a critical role. As this recovery takes hold we need to se private capital come back into the market.
VELSHI: We've just been reporting that fully a quarter of loan applicants who think they could qualify for a mortgage in the private sector just don't. That's good we're not lending money to people who can't pay them, but at the same time, are we keeping a lot of people out of the market that will help us recover?
DONOVAN: Ali, I do have concerns that in some places, we may be restricting people that are good risks, that can be successful homeowners. And let me give you an example. We saw many lenders taking our FHA standards, we say that if you don't have a 580 credit score or higher you need to put a bigger down payment down.
So we've raised our standards. But we saw banks even going farther than that. And we thought that we were leaving good folks on the sidelines and potentially hurting the recovery as a result. So we worked with lenders and we've seen a number of them step back, those requirements, to what we think are our strong FHA standards are and so we're hopeful that that can help more folks be able to get into this market. As you said, at a time where prices really do present an opportunity.
VELSHI: Let's talk about one of the biggest things affecting all of us, rising energy prices. If there's ever been a time to try to retrofit your home or do something to your house to make it more energy efficient that's what actually brings you to town, you got something called the FHA Power Save that's going to help people get loans to fix their houses?
DONOVAN: Absolutely. This is the first time we've ever had the federal government helping the private sector provide retrofit loans. Now, let's say you're going to fix up your kitchen, let's say you're going to put on a new roof, come, you can get up to $25,000 from FHA, we have 18 lenders that we're announcing today across the country are going to offer this product.
And the great thing about this, Ali, is that, you know, with gas prices close to $4, this is something that is hitting people's pocketbook in a way that just can be devastating for families. And often times, those - money is flying out the window, those old windows, because we're not doing the simple things that we can do to make a house more energy efficient. But, it's hard to get the capital. So the idea here is, we're testing this in a pilot form, we believe we can show that you can reduce your energy bills enough, to pay for this second mortgage that you would get.
So if we can do that, we think this could take off on a scale that's remarkable. The president said we got to win the future by out innovating our rivals and out building our rivals. This will create 3,000 jobs just through the retrofit but they're 21st century jobs because they'll be installing new technologies that will keep us ahead of the rest of the world.
(END VIDEOTAPE)
CHETRY: All right. So you get a clearer picture of where things may be headed?
VELSHI: Yes. It is tough because I just think home prices are low right now, interest rates are low, it's the perfect opportunity. If we're not seeing everybody getting into the housing market now, I don't see that it's getting a lot better. Sure prices may go down a bit, but 4.8 percent for a mortgage.
CHETRY: Absolutely. But what about the fact that it's harder to qualify (INAUDIBLE)
VELSHI: It is, The fact is, of course, a quarter of people who apply are not qualifying. This is an almost intractable situation. But I like the idea that they're supporting loans for people to make their houses more energy efficient. With energy prices going up, that's got to be pretty attractive.
CHETRY: Exactly. We are going to be talking about a couple of interesting things from the tech world. One is the advent of the new tablet that's available, this is the Blackberry tablet, smaller than the iPad. Is it useful? We're going to be talking about that and also what about iPhone privacy concerns and what about the big web crash yesterday because of Amazon?
VELSHI: That was interesting. All morning I couldn't use Hoot Suite. And I didn't know what it was. And that's what it was.
All right. Also, up to 10 inches of rain in parts of the Midwest. There are flood watches in effect. Boy, they can't get that rain down in Texas where they need it, but the Midwest has got more than its share. We'll tell you all about it when we come back.
(COMMERCIAL BREAK)
CHETRY: Forty-six minutes past the hour. A lot going on this morning. We want to run down the top stories for you right now.
First, Nevada senator John Ensign is quitting in the middle of a sex scandal. Ensign's last day will be May 3rd he announced yesterday. He admitted to an a affair with an aide earlier in the year. He's now under investigation for ethics violations.
Senator John McCain getting a warm welcome from Libyan rebels in Benghazi. McCain arrived in the rebel stronghold overnight to meet with leaders of Libya's opposition. He's been a supporter of military action in Libya to help unseat Moammar Gadhafi.
A technical glitch at amazon.com causes dozens of popular Web sites to crash. The reason why, Amazon rents out space on its server to sites like Redit and Four Square and Hoot Suite. After 12 hours, most were running normally. Some, though, still a little slow even today.
Well, you're caught up on the day's headlines. AMERICAN MORNING is back in 60 seconds.
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VELSHI: Such a beautiful city. Even looks nice in the rain.
CHETRY: It does. Right now with all the lights still on there.
VELSHI: Chicago -- you know, our producer this hour, Michelle Mertoff -- from Chicago.
CHETRY: Don't give her address.
VELSHI: No, we're not. And I hope she turns her iPhone off so it doesn't track her. But it's 41 degrees, going to be 47 later today. There's nothing that can make Chicago unpleasant.
CHETRY: Nothing.
VELSHI: Although there are some floods going on in the Midwest, not Chicago, but other parts of the Midwest.
CHETRY: Yes, we're still dealing with some pretty extreme weather. Jacqui Jeras tracking all of it for us. But I still love your sunny for the bunny.
VELSHI: Are you doing this to undermine the fact that we said we didn't really have a lot of severe weather? And then Jacqui went on for two minutes to contradict everything I said.
CHETRY: Yes, well, she just wants our viewers to be informed.
VELSHI: You'll notice I won't be introducing you for the rest of the day, Jacqui. The producers have left that to Kiran.
JACQUI JERAS, AMS METEOROLOGIST: All right then. Hey, you know, just pay attention today, Ali. That's all I ask.
VELSHI: That's OK. I'm on it.
JERAS: All right, we do have a lot of extreme weather to talk about. How optimistic were you about Chicago, by the way? It is kind of a dreary, lousy day for you in the Windy City, and this is going to be kind of what you see is what you get as we approach through the weekend. We have a very active jet stream pattern, which is going to bring moisture kind of in from the Southwest through the middle of the Mississippi River Valley, through the Ohio Valley into the mid- Atlantic states. We're going to see these waves of showers and thundershowers bringing torrential downpours.
Slight risk of some severe thunderstorms still kind of kicking here into eastern parts of Kansas and into Missouri as well. More widespread severe weather will be possible from Texas over to Indiana later on today.
But here's what worries me the most. The ground is already very, very saturated in these areas. And the forecast in the next five days is showing a major bull's eye here of as much as 8 to 10 inches of rainfall. So, that's going to fall in these river valleys. Major flooding expected by the end of the weekend. Flood watches and warnings in effect.
It's a holiday weekend for millions of Americans. People are going to be traveling. So, make sure you turn around, don't drown as you're out there for today.
Here is the big picture, staying cool and dreary across the North. Very warm and sultry across parts of the South, feeling downright humid. Here's your Saturday forecast. Showing you all that flooding rain. Then we're going to see more of that once again on your Easter Sunday. There is your sunny for the bunny, guys, by the way. Southwest and southeast for the most part.
And did you know - you guys said, OK, we got Good Friday, right? We have earth day today. It is also National Jelly Bean Day.
VELSHI: No way!
JERAS: I just learned that. I'm so excited!
VELSHI: That changes everything.
JERAS: It does! Do you love the Jelly Bellies?
CHETRY: Jelly Bellies, my favorite.
JERAS: So good.
CHETRY: My favorite, what is it called, sour pear? Or what is it called?
JERAS: Sour pear? I'm not familiar with that one.
CHETRY: It is one of the flavors, so delicious.
VELSHI: We're going to go get some after the show.
CHETRY: OK.
JERAS: Going to have to.
VELSHI: Because we need a little bit, you know, of kick.
JERAS: With Peeps yesterday, Jelly Bellies today --
VELSHI: That's right! That's what it is. I am on a sugar low because I don't have my Peeps this morning.
CHETRY: Right. He gave up sugar for Lent, you're excited about Sunday. Thanks, Jacqui.
Well, McDonald's forecast: higher food prices. Coming up, Stephanie Elam is watching your money. VELSHI: And hundreds of endangered whales swarming in the coast in New England. We are going to tell you about those when we come back.
And, by the way --
CHETRY: A week until the royal wedding!
VELSHI: I know, it's crazy. You are going to be gone in just a couple days.
CHETRY: Oh, yeah, I am heading out, heading to London. And we are going to be covering a lot of fun things, not only about the wedding but about London and what is going on as this royal wedding, one we haven't seen and been excited about since the 1980s. Coming up. Fifty-two minutes past the hour.
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CHETRY: All right. So the big day is just a week away. We are talking about London and the royal wedding, of course. I am going to be there to help bring you every moment of the ceremony: the pageantry, the electricity of the crowd. So, we want to show you what we have planned.
VELSHI: Thank you.
CHETRY: All right, good! Not just for Ali, but for everyone.
The first exciting thing that's happening, Clarance House, you know, is where Prince Harry and Prince William live. Actually, Kate Middleton lives there as well. That's where they are going to be departing from to head to Westminster Abbey, 10:10 in the morning. All of this is, like, by the minute.
At 10:50 is when the bride departments from the hotel she's staying at where her whole family is going to be. All right. So, then the next thing that happens is they move on to Westminster Abbey - this is very exciting - for the next part, which is, of course, where the wedding is going to be taking place at 11:00 a.m. is the wedding service. 11:10 a.m. sharp.
Then at 12:15, they return the palace in the big horse and carriage procession, that's what everybody is going to be watching throughout the streets. And they end up at Buckingham Palace. And of course, the exciting thing about this is this reception the queen is going to be hosting. And at 6:00 p.m., a private dinner followed by dancing, and that's hosted by Prince Charles. They have all of this planned out to a tee.
OK, cool. So, what are we going to do when we're in London? We're going to be visiting all the different sites and places that we want to go to. First, when we land, heading to the Dorchester Hotel where we are going to have tea with Zain Verjee, who knows all the ins and outs of the city --
VELSHI: Is that a royal wedding event?
CHETRY: No. That is a Zain Verjee event. Exactly. She's taking us to go to Picadilly Circus where we are going to look at all the shops. We're going to make our way to the mall. We're going to follow the wedding route up and down the mall --
VELSHI: A mall like a mall?
CHETRY: No, not like a mall mall. It's like - oh, gosh, I should have done that. It's basically the big square. This is where they expect thousands of people to sort of be gathered on the streets there to watch the parade route.
VELSHI: Like the National Mall here.
CHETRY: Exactly. Very, very exciting and then - where are we going next? The horse and guards parade. We are going to be checking out Big Ben and all the big sites. Westminster Abbey, as you know and 10 Downing Street.
VELSHI: Which you miss if you blink. 10 Downing Street. It doesn't have that grandeur of everything else there.
CHETRY: It is a little bit like a townhouse in Georgetown.
VELSHI: That's exactly what it looks like.
(LAUGHTER)
CHETRY: But we are going to have a big, fun blast when we head there. So, just wanted to show you what we're going to be doing.
VELSHI: And then (INAUDIBLE) bridge. Very good
CHETRY: No bungee jumping.
VELSHI: Is this all some kind of tour you are doing?
CHETRY: Yes!
VELSHI: Are we following you?
CHETRY: Yes!
VELSHI: All right. It is going to be fun.
All right. Big day. One week away. Friday, April 29th. It starts at 4:00 a.m. All these times you've been giving us have been local times, London times. If you are watching here in the United States, it starts at 4:00 a.m. Eastern. Tune in to CNN to watch it, to DVR, to participate. Kiran, Anderson Cooper, Piers Morgan, Richard Quest, Pat Dealey, they will bring you every unforgettable moment of the royal wedding.
Our top stories right after the break.
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