Return to Transcripts main page

CNN Newsroom

JPMorgan Loss Twice as Big as Thought; JPMorgan Loss Affects CEO's Image; Penn State Responds to Freeh Report; Bombarded with Negative Ads; Rebels: Bloodiest Day Yet in Syria; Blind Teen Competes in Beauty Pageant; It's a Big A-Shark

Aired July 13, 2012 - 09:00   ET

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

CAROL COSTELLO, CNN ANCHOR: Happening right now in the NEWSROOM, security threat. A D.C. police officer on desk duty this morning after he was reportedly overheard saying he would shoot the first lady.

Red light runner. An amazing crash. A driver airborne and now arrested for DUI. The terrifying moments all caught on a traffic camera.

Still standing. The fate of the bronze statue of Joe Paterno in question. New calls today and a push to bring it down. Penn State carefully weighing its options.

And burn the uniform. Senator Harry Reid wants to torch the Chinese made clothes saying he wants Olympians to wear shirts with the USA on them. This morning the Olympic Committee responds.

NEWSROOM begins right now.

And good morning. Happy Friday 13th. I'm Carol Costello. We begin this hour with a very bad day for the nation's biggest banks. JPMorgan Chase and its CEO Jamie Dimon are opening their books, telling us just how much money the firm lost in a bunch of risky trades. The blunder stunned the financial world and fueled more debate on whether banking regulations are tough enough.

Alison Kosik is at the New York Stock Exchange and has been listening to a JPMorgan conference call this morning.

Alison, what have you heard?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: OK, so if you're totaling up the losses so far this year from those trading losses from the risky trades, what it adds up to is $5.8 billion. That's almost triple what was originally thought. But CEO Jamie Dimon said, guess what, those loses can get even bigger by another $1.7 billion.

Now keep in mind just because these trades were discovered, they were announced to everybody, you know, they can't just suddenly be stopped. So what has to happen is the bank still has to unwind some of these trades. Many of which were very complex, and that takes time.

But get this. Even with the trading losses that were announced today, the bank still beat expectations, reporting a $5 billion profit in the second quarter. It's taken in $9.9 billion in total profit so far this year. Also the bank says its chief investment office, that's where all these losses came from, will no longer trade these complex derivatives.

Now here's something, Carol, that makes today's announcement kind of interesting. These releases normally come during a very short conference call, but instead CEO Jamie Dimon is actually sitting down with (INAUDIBLE) JPMorgan's headquarters here in New York right now. He's extended the meeting to two hours. You know, it looks like Dimon knows he's got a lot of explaining to do to get that investment confidence back and let people know that the bank does have things under control.

Just so you know, JPMorgan shares were up more than 1 percent ahead of the Opening Bell -- Carol.

COSTELLO: Alison, thank you.

Here's why the JPMorgan story matters. It's the nation's largest bank and a stock that's likely in your 401(k). Plus, the shadowy world of derivatives almost brought the financial world to a collapse -- to a collapse, rather, just a few years ago.

Christine Romans join me -- joins me now with more.

Good morning, Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Good morning. All those reasons are why so many people are looking at what might be seen as -- deemed as a business story and saying this is a story for everybody, right, Carol? I mean this is a trading loss that happened right under the nose of what was thought to be the smartest banker in the room, Jamie Dimon. And this trading loss showing even from the very beginning, when he first said it was a tempest in a tea pot, remember? Then he said oh, it'll be a $2 billion trading loss.

And now, now it's $5.8 billion. And really the period is not on the sentence of that yet. I mean we'll have to see how the rest of this trade is unwound. So $5.8 billion loss shows very significant risk failure in this bank from some of the very people that were depending on having very, very good risk management because of how important banking is to the economy -- Carol.

COSTELLO: So what about banking regulations? Will anything happen -- in light of this new information?

ROMANS: It's interesting because when you look at this, so even a $5.8 billion trading loss, that's huge. It is embarrassing, it is dumb, it's a big stumble. I mean Jamie Dimon on the call right now still talking about how we really messed up. This has shaken us to the core. We are changing. Nobody feels this more than we do. I mean the question, what kind of regulations could protect you against, you know, just making a really big dumb mistake?

Also, very important to note, last year this company made $19 billion in profit. Even if this is more than a $6 billion trading loss, the profits of this company are still going to be able to absorb it. I mean think of that. This company, even with this big stupid mistake, is still making a ton of cash, $5 billion in just three months. So it's still a very profitable business. JPMorgan is still a very profitable business.

COSTELLO: Christine Romans, live in New York. Thanks.

ROMANS: You're welcome.

COSTELLO: Turning now to politics. While President Obama is often praised for his speaking skills, the commander in chief says he may not have done enough to sell his message to the American people. In an interview with CBS News, Obama reflected on his first term and how important it is for a president to inspire the people who put him into office.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The mistake of my first term, couple of years, was thinking that this job was just about getting the policy right. And that's important. But, you know, the nature of this office is also to tell a story to the American people that gives them a sense of unit and purpose and optimism, especially during tough times.

(END VIDEO CLIP)

COSTELLO: President Obama went on to say that if re-elected, he will make an effort to get out of Washington and spend, quote, "more time with the American people listening to them."

And a Washington, D.C., police officer who was a police escort for members of the Obama administration has now been reassigned. "The Washington Post" is reporting the motorcycle cop was overheard saying he would shoot Mrs. Obama. The newspaper reports there's no indication the first lady faced any real danger. The Secret Service says it is following up on the incident.

There is new fallout this morning from the report condemning Penn State's handling of the Jerry Sandusky child sex abuse cases. Many people are calling for the statue of Joe Paterno outside Beaver Stadium to be taken down. No response yet from the university, though the Board of Trustees will speak publicly today.

CNN's Susan Candiotti is in Philadelphia.

Good morning, Susan.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Carol, the Freeh report a brutal assessment of what went wrong and how Jerry Sandusky was able to rape and molest so many children over the course of at least 15 years. Louis Freeh finding that four top Penn State officials were part of what he called a culture of secrecy built around protecting the image of Penn State University and its football program.

(BEGIN VIDEO CLIP)

LOUIS FREE, FORMER FBI DIRECTOR: Our most saddening and sobering finding is the total disregard for the safety and welfare of Sandusky's child victims by the most senior leaders at Penn State. The most powerful men at Penn State failed to take any steps for 14 years to protect the children who Sandusky victimized.

Mr. Spanier, Schultz, Paterno, and Curley never demonstrated through actions or words any concern for the safety and well-being of Sandusky's victims until after Sandusky's arrest.

(END VIDEO CLIP)

CANDIOTTI: Freeh's investigators found that Joe Paterno knew about problems with Jerry Sandusky going back to 1998. Despite his grand jury testimony to the contrary. And an interview he did with "The Washington Post" just before he died.

Freeh disclosing some new e-mails, including one written by Athletic Director Tim Curley, saying that Joe Paterno wanted to be kept abreast of what was going on about that problem back in 1998 involving Jerry Sandusky and a boy. And then he also showed a handwritten note, written by Vice President Schultz, asking this. "Is this the opening of Pandora's box? Are there other children?"

Now lawyers for President Graham Spanier aren't commenting. Attorneys for Curley and Schultz, who are charged with lying to a grand jury and failing to report child abuse, say that the Freeh report is not complete and that their clients will be vindicated at trial. Spanier has not been charged.

The Paterno family is defending the coach.

(BEGIN VIDEO CLIP)

JAY PATERNO, JOE PATERNO'S SON: He said all I knew to do was to tell -- report it to my superiors. This is not a subject that he was comfortable talking about. This type of thing. But he said, look, I knew I had to give it to my superiors because I knew they could handle it better than I could. And he said, I felt like they would handle things. And he said -- he said, in hindsight, I wish I had done more, I wish I had followed up more aggressively.

(END VIDEO CLIP)

CANDIOTTI: Penn State's Board of Trustees, slammed for its lack of oversight in the Freeh report, is promising to take steps to ensure that something like this will never again happen on Penn State's campus. Meantime, the state's criminal investigation is continuing -- Carol.

COSTELLO: Susan Candiotti reporting.

A Madrid-bound delta flight returned to New York last night after suspicious wires were found in the plane's bathroom. The plane parked in a remote area of JFK Airport where passengers were evacuated. The wiring was determined not to be a threat. No arrests were made. And the flight was expected to resume later.

Today Senator Chuck Grassley is raising new questions about Toyota's acceleration problems, and he wants the feds to investigate. The Iowa Republican says he's been tipped off by whistleblowers who believe the federal investigations are, quote, "too narrow." Grassley says his sources went into a closer look at the so-called tin whiskers crystalline structures that might cause unintended acceleration.

Over the past dozen years, there have been some 10,000 reports of cars revving up on their own. A Toyota spokesman tells CNN there's nothing new about these tin whiskers and no proof they occur more often in Toyotas than in other vehicles.

This election season may set the record for airing the most negative political ads ever. But you can't believe everything you hear. Some of the ads are completely false. So how do you know?

(COMMERCIAL BREAK)

COSTELLO: Thirteen minutes past the hour. Checking our top stories now, we now know how big that trading loss is at JPMorgan Chase. This morning the nation's largest bank reported the risky trades cost $5.8 billion. That's nearly triple its initial estimate. But the bank says it still managed to turn a profit.

So when did Mitt Romney really leave Bain Capital? In 1999, according to the Massachusetts Ballot Law Commission? The reason this matters, Romney's exit date has been in dispute and any question will be foddered not only in the presidential campaign but could even trigger an investigation by the Securities and Exchange Commission.

In money news, Wells Fargo is paying up to the tune of $175 million. The nation's largest mortgage writer is settling allegations that it discriminated against African-American and Hispanic borrowers. The Department of Justice says 30,000 minority borrowers were charged higher fees or pushed into more costly subprime loans.

In weather news, a severe drought is taking hold of the Midwest and it's sweeping across much of the country. In fact, drought conditions are now confirmed in nearly 2/3 of the lower 48 states. That's a big jump from last week when it was about 50 percent.

NBA star Blake Griffin will reportedly miss the Summer Olympics because of a knee injury. His team, the Clippers, says he tore his left meniscus and will need arthroscopic surgery. The Hornets' Anthony Davis will take his place on Team USA.

It woke you up, didn't it? This is what it's like to race down a highway at break-neck speed, reaching 186 miles per hour. But this motorcycle joyride probably won't have a happy ending. Police in Canada have identified the 25-year-old daredevil who videotaped himself and they are now looking for him.

Mitt Romney's already brimming campaign is a lot richer this morning, thanks to Dick Cheney. There was a big fundraiser in the shadows of the Grand Tetons at a country club near Mr. Cheney's home. Cheney sat near Romney as he spoke passionately about America's thirst for newest leadership. Cheney then took the microphone and told the crowd Romney is the candidate who could handle a crisis like 9/11.

The event raised a whopping $4 million.

And it seems everyone is wondering who will Mitt Romney pick to be his running mate? Today there is new buzz it could be Condoleezza Rice. The "Drudge Report" cites unnamed sources as saying the former secretary of state is near the top of Romney's list. The stories all over the Internet.

But remember, Condoleezza Rice has repeatedly said she is not interested, and she supports abortion rights. Romney says his running mate would be anti-abortion, so this could all be speculation.

CNN has no information about rice being on Romney's list.

This year, you may be bombarded with more negative political ads than ever before. Take a look at these numbers. Just in Columbus, Ohio, one major city in a swing state, more than 1,600 spots air between July 1 and July 12. That's a lot of spots in 12 days.

Compare that to the same time period, same city, during the 2004 election, and you see the number is more than triple. All of these ads, by the way, are negative ads like this one from President Obama's campaign.

(BEGIN VIDEO CLIP)

NARRATOR: Mitt Romney's companies were pioneers in outsourcing U.S. jobs to low-wage countries. He supports tax breaks for companies that ship jobs overseas.

(END VIDEO CLIP)

COSTELLO: And this response from Mitt Romney.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I'm Mitt Romney and I approve this message.

NARRATOR: When a president doesn't tell the truth, how can we trust him to lead? The Obama outsourcing attacks: misleading, unfair, and untrue. There was no evidence that Mitt Romney shipped jobs overseas.

Candidate Obama lied about Hillary Clinton.

HILLARY CLINTON (D), THEN-PRESIDENTIAL CANDIDATE: So shame on you, Barack Obama.

(END VIDEO CLIP)

COSTELLO: It turns out that both ads are misleading. There's not much evidence to support Obama's claims that Romney promoted outsourcing jobs. And Romney's ad took the Hillary Clinton quote out of context.

So, the question this morning: if a political ad is misleading or flat-out untrue, why is it on television?

Joining us now is Ken Goldstein in Washington. He's the president of the Campaign Media Analysis Group.

Good morning.

KEN GOLDSTEIN, CAMPAIGN MEDIA ANALYSIS GROUP: Good morning, Carol. How are you?

COSTELLO: I'm good. So, first question, why can candidates put an ad on television that's misleading or even untrue?

GOLDSTEIN: Well, in the case of those ads, which are both ads that are paid for by the candidates, it would actually be illegal for the stations to not take the ad, that candidates for federal office, there can be no censorship in the ads that they air on television. So it's a very simple answer. They can because it would be actually illegal if someone stopped them from doing it.

COSTELLO: Because it would be in violation of their First Amendment rights?

GOLDSTEIN: Exactly. The way the -- there's FCC regulations. Now it's different for groups. So stations not only can but are required to look at the ads that groups air. But groups air -- or ads aired by the candidates, candidates get to say what they want.

COSTELLO: So the group puts an ad on that's untrue, it's up to the individual broadcasting entity to pull that ad off, right?

GOLDSTEIN: Well, it's the responsibility of the individual broadcasting entity to review every ad that it is given to air. I'm sure your station reviews every single ad that it airs, whether it's for cars or pharmaceutical drugs or for groups airing political ads.

COSTELLO: So people are being slammed by these ads. And, you know, you gave us this example of Columbus, Ohio. All of these ads are negative. And they are running constantly in television markets. Is that harmful? I mean, how can people make the right decision about who to vote for when they are constantly being slammed by negative, sometimes misleading ads?

GOLDSTEIN: A couple of things. Before I took over here as head of Kantar Media/CMAG, I was a professor for a very long time. And one of my focusing was looking at advertising in general and negative advertising in particular.

And, listen, people have been saying this is the most negative television campaign for as long as there has been television. And people have been saying this is the most negative campaign as long as there have been campaigns in the United States.

COSTELLO: But that doesn't make it right.

GOLDSTEIN: Well, it hasn't changed. And when I actually look at the evidence and what other scholars have looked at, we actually see no evidence that advertising or negative advertising in particular does anything to depress turnout, to disengage people.

And in fact, the findings are typically the opposite. That exposure to advertising actually makes people more knowledgeable about the candidates, spurs them to go out and learn more information and actually makes them more likely to turn out, not less likely to turn out.

COSTELLO: But aren't they casting their vote based on sometimes faulty information? Is that bad?

GOLDSTEIN: Well, again, listen, I think we have to give people credit. There is a tremendous amount of information out there.

And, listen, viewers watching your show right now, once I got put in this little room I couldn't hear what the ads were, but the ads when I was in the green room were mostly political ads. So, if they're sitting here watching CNN, they are getting some information from political advertising. They're getting some information from you. They are getting some information from me. They are getting some information from other correspondents. They may be going on Web sites and reading their morning newspaper.

So television advertising isn't the only way that people get information. And, listen, although I have made a career studying campaign ads, and I'm in a business now where we track campaign ads, this election is not going to get decided by a silver bullet ad. There's fundamental factors that drive elections in this country, party identification, the state of the economy.

Now, can the campaign matter at the margin? Absolutely. And is television and advertising an important part of a campaign that can matter at the margin? Yes.

But it's not going to be this one silver shot that's going to win or lose an election for one of the candidates.

COSTELLO: Ken Goldstein, thanks for joining us this morning.

GOLDSTEIN: Thanks for having me.

COSTELLO: On the international front, a horrifying situation in Syria gets even worse. It's being called the bloodiest day since the protests began.

(COMMERCIAL BREAK)

COSTELLO: In Syria, reports of the bloodiest single day since the uprising began 16 months ago. An opposition group says government forces massacred 220 people in the province of Hama alone. The group says villagers were shot indiscriminately when they fled their homes.

Joining me live from Abu Dhabi is CNN's Mohammed Jamjoom.

There is just no end in sight.

MOHAMMED JAMJOOM, CNN CORRESPONDENT: That's right. And the reports we are getting from activists are extremely disturbing. They say that yesterday, which they called the deadliest single day since the Syrian uprising began 16 months ago, they say that yesterday, in the province of Hama, the village of Trimsa, that it was surrounded by security forces, by tanks, and it was shelled for several hours. And that after the shelling stopped, security forces and pro regime militias came into the town and started slaughtering families indiscriminately.

Now, we've seen some very disturbing videos emerge so far. We must warn viewers they are very graphic in nature. One video purports to show several bodies in the street, very, very bloody and very, very gruesome.

Another video purports to show a man weeping over the corpse of his father, who activists say was killed as a result of that massacre yesterday in Trimsa. Very, very, very sad stuff. And people are telling us it was just horrifying in that town.

Now for their part, the Syrian government, they're continuing to blame the violence on armed terrorist groups. The Syrian government put out a statement, they said that what happened in Trimsa was that the residents of the town called for help because there were armed terrorist groups there. That security forces arrived, started clashing with those terrorists, and that as a result 50 people were killed in that town yesterday -- Carol.

COSTELLO: The former U.N. chief, Kofi Annan, is in the country. Some government protesters are saying he should leave because this is actually spurring more violence. Anything to that?

JAMJOOM: Well, there's a lot of outrage being directed today not just at the Syrian regime, but inside Syria we are hearing of a lot of protests in places like Idlib, in places like Aleppo, where anger is being directed at Kofi Annan. They are calling it the Friday asking for the removal of Kofi Annan as a special envoy to Syria.

Why? It's because the people of Syria feel that the U.N. observer mission and Kofi Annan have been completely ineffective, that ever since they've been coming there, they feel that the violence has really just spiraled out of control. They haven't been able to do anything to staunch the violence. So they are very upset about that. They believe these bodies bear some responsibility.

Now, earlier today, we heard from General Robert Mood. He's the head of that U.N. envoy mission that is in Syria, even though the mission has been suspended. Now, he verified that this violence that happened in Trimsa yesterday, and here's more of what he had to say.

(BEGIN VIDEO CLIP)

GENERAL ROBERT MOOD, HEAD OF U.N. ENVOY MISSION: From our presence in the Hama province, we can verify continuous fighting yesterday in the area of Trimsa. This involved mechanized units, indirect fire, as well as helicopters. And we stand ready to go in and seek verification of facts if and when there is a credible cease- fire.

(END VIDEO CLIP)

JAMJOOM: Kofi Annan also issued a statement today in which he said he was shocked and appalled at what happened, that the news of what happened in Trimsa yesterday. He said that the U.N. mission there should be able to go in and investigate, but the key is, will they be able to? Nobody knows at this point -- Carol.

COSTELLO: Mohammed Jamjoom, reporting live from Abu Dhabi this morning.

Also this morning in Canada, a state of emergency in the wake of a devastating landslide. Searchers are scrambling to find people who may be buried.

(COMMERCIAL BREAK)

COSTELLO: Good morning to you. I'm Carol Costello.

Stories we're watching right now in THE NEWSROOM:

Those JPMorgan trading losses last night, the ones Jamie Dimon called indefensible, well, today, we have learned they are nearly three times as bias originally thought. Instead of $2 billion, the losses total $5.8 billion.

Today, search crews are getting back to work on this landslide in British Columbia. It swallowed three hopes. Four people are missing. Rescuers have been hampered by instability in the mountainous area as well as poor cell phone service.

More on the scathing report of Penn State's handling of the Jerry Sandusky scandal. The university's board of trustees meets today after being accused in the report of in its oversight duties. In the meantime, some are calling for the removal of Joe Paterno's statue at the school. The legendary coach and top school officials were blasted for covering up for Sandusky and his abuse of children.

Opening bell at the New York Stock Exchange. Big news today as JPMorgan Chase announces it lost a total of $5.8 billion in bad trades earlier this year. Is the news moving the markets?

Alison Kosik is at the New York stock exchange to tell us.

Good morning.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning, Carol. It looks like investors are feeling OK with what they heard today out of earnings out of this conference call that continues with CEO Jamie Dimon. Stock right now of the JPMorgan chase shares are up almost 3 percent. Yes, you're looking at the first chance for investors to react to all this.

Now, you look at how shares have done since all these news came out about this trading loss. Shares have actually taken a big hit. They've fallen 16 percent. But shares had a big run-up before hand, so when you look at the stock overall for the year, it's actually coming out higher for the year.

Now, the big number everybody was sort of champing at the bit to know was the exact dollar amount of the trading loss. And, of course, at $5.8 billion, yes, that's an eye-popping number. But you know? There's really been a sense that this release today was less about the number itself and more about JPMorgan Chase restoring confidence to its investors and customers.

CEO Jamie Dimon is saying that the traders who were involved in the loss could lose as much as two years of their income because they may have to actually give back some of their compensation because of the money they lost.

And, by the way, they are no longer working at the bank. All of the managers involved with this office behind the loss have been separated from the bank without any severance. So essentially there is a feeling that JPMorgan is taking this seriously and addressing the problem.

And we are sort of getting a certainty on what's happening is the reason we are seeing shares higher today. JPMorgan Chase shares are actually one of the leaders on the Dow -- Carol.

COSTELLO: Interesting. OK. So, it is a bad news day for banks, though, you know, when all is said and done.

Let's talk about Wells Fargo now. Wells Fargo settled with the Justice Department for $175 million over a discriminatory lending lawsuit. Tell us about that.

KOSIK: Right. So actually what's taking the front burner this morning is its earnings report. Wells Fargo did have its report out today. The bank actually, Carol, is raking in $4.6 billion in the latest quarter, that's thanks to strong mortgage banking income.

Now, we know that those 30-year fixed rate mortgages -- 30-year fixed rates rather on mortgages have been hitting record lows almost every single week. They are now at 3.65 percent.

So, what's happening is a lot of borrowers are refinancing, and that's boosting Wells Fargo's results. And as I said, this does come the day after that big announcement yesterday that the bank is settling for $175 million with the Justice Department on allegations it discriminated between black and Hispanic borrowers from 2004 through 2009.

Now, we did see the stock take a hit yesterday. Wells Fargo shares right now are up about half a percent on the favorable earnings news -- Carol.

COSTELLO: Fascinating. Alison Kosik at the New York Stock Exchange.

Busy weekend in San Diego. Geeks, nerds, gamers and everyone else flocking to Comic-Con. It's underway now. We are live there.

And it's lonely at the top for Justin Bieber, but there's one entertainer under 30 who rakes in even more money than the Biebs. Can you guess who it is?

(COMMERCIAL BREAK)

COSTELLO: This is a gigantic weekend for all forms of entertainment. Comic book fans, movie buffs, gamers, 130,000 of them in San Diego right now for Comic-Con 2012.

Nischelle Turner with "Showbiz Tonight" is also in San Diego.

I thought you'd be dressed in some wacky outfit for this story.

NISCHELLE TURNER, CNN SHOWBIZ CORRESPONDENT: Carol, I have so much concealer on. I was telling Ashleigh and Alina this morning, this is my mask. I've been up since 12:30. So I am dressed up this morning.

You know what? This is such a cool convention. Actually, it's chic to be geek. That's what I've been saying for the next three days here in San Diego. 130,000 of the biggest comic book, gamer fans, really descend on San Diego.

And you know what? I dragged one out of bed for you this morning. I made him come talk to us. And he doesn't even really have a voice. But come on in here with me.

Zachary Levi, who is the star of "Chuck," is a big fan. And also he's kind of created this whole Nerd HQ that you brought here.

ZACHARY LEVI, NERD HQ: Yes.

TURNER: I'm going to give this to you and we can share.

LEVI: OK.

TURNER: Say hello to Carol.

LEVI: Hi, Carol.

COSTELLO: Oh, my gosh. You really can't talk.

TURNER: I know. I made him do it, though.

If you could, tell me just a little bit about Nerd HQ, because this is your second year here at Comic-Con?

LEVI: Yes. It's the second year. I really believe in putting a premium on fans. And the fan experience. And so, my company, the Nerd Machine, we decided last year that we were going to throw an event for fans. It's a free event. It's just chock-ful of video games and technology and a place for both fans and celebrities to kind of hang out.

It's like the fort, like the tree house of sorts, you know?

TURNER: But you're not slick, because I think that you're a bit of a fan yourself.

LEVI: Oh.

TURNER: So, this was like a labor of love, right?

LEVI: Totally. And, yes, also a way for us to raise as much money as we possibly could. I really believe in conscientious capitalism. You know, you can make a buck but give a buck at the same time. So, we do panels.

Like Comic-Con is amazing. They have giant panels with 5,000, 10,000 people. We do really small, intimate ones where fans pay per seat, 20 bucks. Every cent goes to Charity, to Operation Smile.

TURNER: That's right.

LEVI: I'm an ambassador for them.

Last year, we raised $40,000. This year, we're on track to raise $100,000.

TURNER: Fantastic.

LEVI: Yes.

TURNER: And somebody also, I know you're a little tired this morning, but I heard you had this impromptu dance party yesterday. What did you do?

LEVI: Well, so, tonight -- tonight is the big nerd party that we throw every year. But last night was the army nerd party. It was the fans. And it was great. Everybody came out, all the fans and all the public.

And then I was going to go to bed. And then Nathan Fillion just showed up. And he and I started dancing. And then some of my cast from "Chuck", Yvonne Strahovski, and Vik Sahay, they all just showed up, and some of my friends from the show, "Haven," Emily Rose, Eric Balfour, so people just showed up. And I said, all right, forget it, let's dance.

TURNER: Zachary Levi at an impromptu flash mob at Comic-Con, Carol.

Thank you so much, Zachary. Appreciate it.

LEVI: Thank you.

TURNER: And congratulations on everything. Again, Nerd HQ here at Comic-Con, all the proceeds go to Operation Smile. And we love that.

So that's kind of what I'm doing, hanging with Zachary this morning. He's got his coffee. He didn't bring me any. But I'm going to get some, too, and we'll see you later.

COSTELLO: I know. I wish I could give him should cough drop, but I can't. Thank you both for being with us this morning.

TURNER: I know.

COSTELLO: It's been great. Have fun and I'm jealous, Nischelle.

Aerosmith's frontman, Steven Tyler, says he's leaving his mistress, aka, "American Idol" after two seasons. Tyler says "Idol" was over the top fun, but he said it's time to bring back the rock and roll.

He ain't kidding. Aerosmith's 15th studio album, "Music from Another Dimension" is due out in November. Tyler confirmed his exit in a statement saying, "After some long hard thoughts, I have decided it's time for me to let go of my mistress 'American Idol' before she boils my rabbit."

So we know Steven Tyler is out. About you there are also rumors swirling that both Randy Jackson and Jennifer Lopez may call it quits.

And an appearance on "The Today Show," an emotional Lopez said, quote, "Maybe it's time for me to go."

There are also reports that Jackson plans to move out of the judge's chair into a mentoring role instead.

Entertainment is a young woman's world. "Forbes" just released its list of highest paid celebrities under 30. And guess what? Young women dominate the top five.

Taylor Swift tops the list, raking in $57 million from May of 2011 to May of this year. Not only are her albums blockbusters, but her concerts make big money, too.

Other female singers like Rihanna and Katy Perry made the top five. The only guy in the top five, 18-year-old Justin Bieber. He nipped at Taylor Swift's heels earning $55 million to land in the number two spot.

Most of us use the same passwords for everything. But you should be concerned about that. Several thousand online accounts have been hacked, and now everybody knows what your password is.

And these Olympic uniforms. Some say they look nice. We know they are not made in the USA. And one American senator wants to burn them. We'll explain.

(COMMERCIAL BREAK)

COSTELLO: It's 45 minutes past the hour. Checking our "Top Stories" now, remember those errant trades of the Chief Investment Office at JP Morgan Chase? Well, just a few hours ago we learned those bad trades cost the investment giant $5.8 billion. Those trades rocked the financial world. And JP Morgan Chase has lost about 15 percent of its value since those trades were announced.

Here is a story that may nudge you to change your password. More than 450,000 Yahoo accounts were hacked this week, and the user names and passwords posted online. And get this. The hack is not limited to Yahoo users. Some Gmail, AOL and Microsoft live accounts were also compromised. If you're a Yahoo user and want to see if your account was part of the hacked, just go to the Web site we have up on the screen and plug in your e-mail. Good luck.

Southeastern Texas gets hit hard by floodwaters again. New pictures is just in to us. You could see heavy rains in Houston left many streets underwater. Some areas got drenched by seven inches of rain and several thousand homes are without power this morning.

The summer Olympics start in just two weeks and the top man in the Senate wants Team USA to burn its uniforms for the opening ceremonies. Democrat Harry Reid is mad that the uniforms designed by Ralph Lauren were actually made in China. The U.S. Olympic Committee is sticking by the controversial clothing, though.

And take a look at this. A crash caught on traffic cameras in New Jersey last month. Oh. You can see headlights coming towards you and then that happens. The driver, you know, he -- he has a red light but he didn't stop. The car hit another car. It spun in the air, takes out a light bulb before landing on the side in the other lane. The driver was charged with, guess what, DUI.

One beauty pageant contestant has reason to be worried about stumbling onstage. She's -- she's legally blind, but she's not making any excuses. Her incredible story is next.

(COMMERCIAL BREAK)

COSTELLO: Welcome back.

An 18-year-old girl, is actually a young woman she's competing in the Miss Florida, USA contest and she's quite an inspiration. That's because Connor Boss is legally blind but she is not going to let that get into her way.

Here is John Zarrella.

(BEGIN VIDEO CLIP)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): Just to see where to sign her name, Connor Boss must hold her face inches from the signing sheet. You see, Connor is legally blind.

(on camera): We're what, maybe four feet apart, if that, and you can't see me. CONNOR BOSS, PAGEANT CONTESTANT: No. It affects my retina, and it's -- my central vision. So my peripheral vision is intact.

ZARRELLA (voice-over): At six months old Connor developed over her left eye what's called hemangioma, a build-up of red blood vessels. Surgery took care of that. But within a few years, she was diagnosed with Stargardt's, a rare disease. And one had nothing to do with the other. Just plain bad luck.

BOSS: I fell going down the steps of the Lincoln Memorial, believe it or not but, you know, I managed.

ZARELLA: Stargardt's, a gradual worsening of sight until blindness, is incurable. But Connor also has an incurable thirst to overcome her disability. She was in gymnastics until --

UNIDENTIFIED FEMALE: And then when she had to do vault, she actually ran into the vault one time.

ZARRELLA: While Connor can barely see, her vision of the future is clear. She is the first legally-blind woman to sign up to compete in the Miss Florida, USA Pageant. Winner goes to the nationals. Her journey here began just a couple of years ago when she was 16. On a whim, she entered a local teen pageant and won.

(on camera): So which one was the first one you won?

BOSS: That bad boy.

ZARRELLA: And what's that bad boy?

BOSS: That is Harvest Queen.

ZARRELLA: Connor says each new success, each crown, helps build in her a confidence and self-esteem that was lacking. And each new success led her here.

JESSICA SANTIAGO, PAGEANT CONTESTANT: What makes her special is her drive. She's admirable, she doesn't give up.

ZARRELLA: Pageant officials say other than helping Connor get to march on the stage she's treated like all the other young women, and she never plays to her disability.

GRANT GRAVITT, MISS FLORIDA USA EXEC PRODUCER: She's the last one who'll tell you this, she prefer you not know and more importantly it's not what I can't do, it's what I can do.

BOSS: I've come to learn that it's not even about winning the pageant. It's about -- I'm so glad that my story could be shared. And that -- at least I can inspire one person and if I can inspire one person, I feel like I've won.

ZARRELLA: Perhaps what is most refreshing, Connor doesn't take herself too seriously.

(on camera): What's on your mind right now?

BOSS: Dinner.

(END VIDEO CLIP)

ZARRELLA: Now, tomorrow night is the finals down in Hollywood Beach. And Connor says no matter what happens, she's going to put aside the pageants for awhile to concentrate on her education. She's taking her 4.2 high school GPA off to Florida State University in the fall -- Carol.

COSTELLO: Oh that is an awesome story.

ZARRELLA: Yes.

COSTELLO: So how did she acquire such a good attitude?

ZARRELLA: You know, she says that it has been the pageants that really, up until then she said she was overweight, she didn't have the self-esteem. And after she entered that first pageant and won, it really started to build confidence and self esteem. The biggest problem she says is she'll never be able to drive and that's what bothers her the most.

COSTELLO: As any 18-year-old might say. John Zarrella.

ZARRELLA: Yes.

COSTELLO: Thank you so much.

ZARRELLA: Sure.

COSTELLO: Fishing, it's supposed to be a pretty relaxing sport, at least most times, unless of course this happens.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (EXPLETIVE DELETED).

(END VIDEO CLIP)

COSTELLO: Oh I'm sure you've seen this video.

Jeanne Moos she has a special take on what happened here.

(COMMERCIAL BREAK)

COSTELLO: Team USA basketball squad begins their pre-Olympic play with a blowout. They crushed the Dominican Republic 113-59 in Las Vegas. The USA converted 27 turnovers into 38 points -- Carmelo Anthony scoring there. Great ball move by Team USA. Also 27 assists on the night. Kevin Durant led all scores 24 points in just 22 minutes.

Team USA has four more exhibition games before their first Olympic contest on July 29th. Team USA's basketball players will be crashing at a hotel in London instead of the Olympic Village. A good thing for them because the beds at the village are just 5 feet, 8 inches long; less than 10 percent of American male Olympians can fit into that size of bed.

It is also too small for a number of U.S. women competing. We hear the beds can be extended, but don't be surprised if an athlete blames his or her losing time on a poor night's rest.

And that's a look at sports this morning.

Just when you thought it was safe to go back in the water, not one but two sharks stole the catch of the day. And both fish tales caught on camera. Here is Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CORRESPONDENT: This is a tale of two fish stories, one on a deck in South Carolina Tuesday, the other in a boat in Australia last year. In both cases, a person fishing hooks a fish, only to have a shark snatch it.

UNIDENTIFIED MALE: (EXPLETIVE DELETED)

MOOS: South Carolina, Australia.

UNIDENTIFIED MALE: (EXPLETIVE DELETED)

MOOS: Now both parties took the name of the Lord in vain.

UNIDENTIFIED MALE: (EXPLETIVE DELETED)

MOOS: But that's where the similarities end.

UNIDENTIFIED FEMALE: It is a shark, a shark. There's a big, big shark.

UNIDENTIFIED MALE: Geez, I hate sharks.

UNIDENTIFIED MALE: Oh God.

UNIDENTIFIED MALE: What a dirty scum. He's gone.

UNIDENTIFIED FEMALE: What a big shark.

MOOS: Sarah Breem had never before caught a fish, let alone encountered a shark.

SARAH BREEM, CAUGHT SHARK IN SOUTH CAROLINA: I was actually kind of scared because I seen it jump and I looked like oh, my gosh, it could jump up here and get me.

MOOS: When you combine the ballistic Americans --

UNIDENTIFIED MALE: (EXPLETIVE DELETED).

MOOS: -- with the chilling Australians. UNIDENTIFIED MALE: Bloody sharks.

MOOS: You get the catch of the day, holy bloody shark. Last year, Australia's nine network morning shows sent a reporter to fish for a shark, supposedly sighted in a lake.

UNIDENTIFIED MALE: I'm going to give you one chance to catch the shark.

MOOS: His cast was impressive, but his catch missed the mark.

UNIDENTIFIED MALE: Oh, no.

UNIDENTIFIED MALE: I'd get to another shark.

UNIDENTIFIED MALE: Ok. Stop now. Stop now. Stop now. Stop now. That's enough.

Peking duck anyone?

UNIDENTIFIED FEMALE: Awkward.

MOOS: But at least the duck was fine, unlike the mackerel that failed to duck the shark.

The one place you'll never catch a shark, in the New York City subway, right. Well, maybe you couldn't catch one but you could buy one. A Web site Gothamist (ph) obtained photos of a guy selling a live baby shark aboard a J train at 1:00 in the morning. He wanted a hundred bucks for the little shark he said he caught at Coney Island after it bit him on the butt.

But seriously, folks. Your chances are way better of hocking a bud, than hocking "Jaws" and grabbing a broom sure beats being shark stew.