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American Morning: Wake Up Call
Obama, Boehner Address the Nation; DSK Accuser To Meet Prosecutors; Private Winehouse Funeral Today; 1,000+ Arrests In Mexico Raid
Aired July 26, 2011 - 05:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CNN ANCHOR: Good morning. It's Tuesday, July the 26th. This is your A.M.: WAKE-UP CALL.
I'm Ali Velshi, joining you live this morning from New York.
Let's get right to it.
One morning, I'm going to tell you this whole debt ceiling mess is over. This isn't the morning. The deadline to raise the debt limit is one week from today.
The president and the House speaker made their cases to the nation last night. Two men and two parties clearly are not on the same page. It's possible they're not even reading from the same book.
So, what happens today is anyone's guess.
Here is the president, the speaker of the House and then a quick word from CNN's senior political analyst David Gergen.
(BEGIN VIDEO CLIPS)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The new approach that Speaker Boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now. In other words, it doesn't solve the problem.
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I want you to know that I made a sincere effort to work with the president to identify a path forward that would implement the principles of "cut, cap and balance," in a manner that could secure bipartisan support and be signed into law. And I'll tell you, I gave it my all.
Unfortunately, the president would not take yes for answer. Even when we thought that we might be close to an agreement, the president's demands changed.
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: You've got the two plans that are out there are ultimately horses that you can ride all of the way to the finish line and the issue becomes, what comes after them? And can you get it done before Monday or Tuesday of next week? I think we're heading through a two-week, three-week extension of this fight. I think the president will accept some sort of extension for two or three weeks to allow this fight to play out.
(END VIDEO CLIPS)
VELSHI: So, the president asked people to pressure their congressmen or women to compromise. And what happened? Web sites crashed, left and hand, Republicans and Democrats, senators and representatives, including House Speaker John Boehner and Senate Minority Leader Mitch McConnell. They were all affected. Most of the sites are back up this morning.
But, hey, the day is young. There's plenty of time to crash their sites later on today.
You're going to hear some Amy Winehouse news as the day goes on. Her funeral is today. It's not going to be some big, public spectacle. It's more like a private and small event, with family and friends. It could be weeks, however, before we know how the 27-year- old singer died, how she died. Winehouse had her share of drug and booze problems over the years.
Her big comeback last month didn't go so well. HLN's Dr. Drew said that she needed more time outside of the spotlight to get her life together.
(BEGIN VIDEO CLIP)
DR. DREW PINSKY, HOST, HLN'S "DR. DREW": What they need to do is drop out and not worry about their job and focus on their recovery. Many times, for months or years before they return to something like touring for a musical performance.
(END VIDEO CLIP)
VELSHI: OK, let's talk quickly about the suspect in the Norway killings. Anders Breivik is spending his first full day in solitary confinement. He reportedly admitted at that he carried out Friday's rampage that left 76 people dead. A judge says Breivik claimed that the attacks were necessary to combat the colonization of Norway by Muslims.
Breivik's father is a retired diplomat living in France. And he said that his son must be mentally ill.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (through translator): No, I'll never have more contact with him. In my darkest moments, I think that rather than killing all those people, he should have taken his own life.
(END VIDEO CLIP)
VELSHI: The father also said he planned never to contact his son again. The judge ordered held in custody for at least eight weeks until his next court appearance.
Now, I'm going to put a monster sum on the money on the screen and I'm going to use the viewer discretion line here because the figure is shockingly big and has lots of zeroes. Take a look, $130 billion. That is roughly the gross domestic product of New Zealand, all the stuff produced in New Zealand. It's also the amount of U.S. businesses will spend this year dealing with data breaches, hackings, cyber crimes and other virtual violations.
The security research company that came up with the number says that's more than tripled than companies spent just five years ago.
I tricked you, didn't I? You thought I was going to talk about the federal budget and the debt ceiling.
Do you want to hear the transportation secretary of the United States get mad? Well, this story did it. You might not appreciate it, either.
So, Congress hasn't reauthorized the FAA, the Federal Aviation Administration. The agency is losing about $200 million every week in taxes. But if you think that translates into cheaper tickets for you, forget it. Many airlines have increased fares, maybe you've noticed that already.
Now, listen to Ray LaHood. He's madder than a first class passenger who gets a warm mimosa.
(BEGIN VIDEO CLIP)
RAY LAHOOD, TRANSPORTATION SECRETARY: They're charging the public for a tax that doesn't exist and putting it on their bottom line. And almost every airline, except for one, made money last year because of baggage fees, because of pillow fees, because of blanket fees, because of food fees.
(END VIDEO CLIP)
VELSHI: It appears investors are not allowing the debt stalemate to get in their way today. Checking on the markets right now. The Hang Seng and the Nikkei both closed higher. And at this hour, the FTSE and DAX are also up.
Let's go to Kristie Lu Stout live from Hong Kong.
Kristie, good morning.
Markets are up despite no good news from Washington, or at least no good news. What's the talk in Hong Kong in today?
KRISTIE LU STOUT, CNN INTERNATIONAL ANCHOR: That's right. Well, here in Asia, green arrows across the board. There is a belief out there that Washington will come through with the debt deal especially after Hillary Clinton's bullish comments here in Hong Kong yesterday.
As you mentioned, Hong Kong's Hang Seng closed up one and a quarter. The Shanghai composite bounced back with a half a percent gain. The Nikkei also closed up half a percent.
At the same time, the yen reached its strongest point against U.S. dollar since the March 11th quake and tsunami.
In Europe, there was a positive start to the day. It's a mixed picture now. Gains for the FTSE and the DAX. Loses for the CAC 40 and the Zurich SMI. In fact, Switzerland's biggest bank, UBS, reported its second quarter profits were down by almost 1/2.
Back to you, Ali.
VELSHI: It is definitely clear that markets -- the smart money is betting that Washington will do the right thing.
Here's an interesting headline from "Forbes" magazine contributing writer, saying friends don't let friends become Chinese billionaires. What's that all about, Kristie?
STOUT: It's a great headline. Now, Ray Kwong of "Forbes" points this out. But this all comes from a most interesting article from "The China Daily."
Now, according to the state-run paper, unnatural deaths have taken the lives of 72 mainland billionaires of the past eight years -- 15 were murdered, 17 committed suicide, 19 died from illness, seven died from accidents and 14 were executed.
So, according to Ray's math, a Chinese billionaire dies every 40 days. But, Ali, there seems to be a replenishing supply. Last year, China had 64 billionaires. This year, according to "Forbes," 115.
VELSHI: All right. But it's risky being a Chinese billionaire.
Kristie, good to see you. We will check in with you later on in the morning -- Kristie Lu Stout joining us from Hong Kong.
Let's go to Jacqui Jeras live from Atlanta.
Good morning, Jacqui. Don't be a billionaire. But do tell us where there are flight delays out there this morning.
JACQUI JERAS, AMS METEOROLOGIST: Yes. I don't think we need to worry about that so much.
We do need to worry about the flight delays, however. There are going to be a lot of them today. And that's really our weather headline this morning, is that there's going to be a lot of pop-up showers and thunderstorms across much of the eastern part of the country. Now, everybody is going to get them all the day long, but they're going to produce some really heavy downpours.
We're starting out this morning with low clouds in New York City and Boston. So, some delays expected there. Thunderstorms expected this afternoon for Atlanta, New Orleans, also the central and southern Florida airports, including Miami, Tampa and Orlando.
Denver, boy, you have had it pretty much the last week or so with these pop-up thunderstorms in the afternoon. That will be the case again today and San Francisco has had quite a few delays the last few days with all that morning fog. And today, in fact, the rest of the week don't be all that different.
So, as we take a look at the big picture, there you can see we're expecting showers and thunderstorms. We do to be a little concerned that some of them are going to be severe, especially in the upper Midwest, that darker red that you see there through the Dakotas, some moderate risks of severe thunderstorms. And some of that will probably happen in the Northeast, too. But damaging winds and hail will be the primary concern.
The heat, oh, yes, you know, it's still out there -- mostly focused on the nation's midsection as we head into the number of consecutive days, into 20s, where numbers are in the triple digits for you in Dallas, you're expecting 103 there, 97 in Memphis, 96 in Kansas City. And there's a nice 81 in Boston. But you got some rain to deal with.
OK. So, we've been under the grips of the heat wave, Ali, for --
VELSHI: Yes?
JERAS: -- how long, for like two weeks, really, right? Longer than that into parts of the plains states. Well, it's hot in other parts of the world, too, especially, in Japan, where they're still dealing without power and having electrical issues after the tsunami and earthquake there.
Well, people are getting creative in trying to stay cool. And there's been a huge surge in products, have self air-conditioning like the hat. And this one I think is for you, Ali. Did you see the tie? There's actually a fan in the knot of that tie.
VELSHI: Oh, no kidding!
JERAS: Yes! And the shirts are the most popular ones, apparently. They cost about $130, U.S. dollars, anyway.
VELSHI: That is brilliant.
JERAS: I know.
VELSHI: I like that with the solar panel and a fan built in.
JERAS: And then it protects you from the sun, too. Yes.
VELSHI: The Japanese are good at that. I've always noticed. When they're here the United States, you know, the women are wearing those parasols that are, you know, nicer versions of umbrellas (INAUDIBLE) from sun. They're used to it.
All right. Jacqui, I'll check in with you later on. Thank you so much, Jacqui Jeras.
All right. Safe for the environment and safe for the people inside, an all-electric car aces the government's crash safety test.
But, first, here's our quote of the day, quote, "There's something profoundly wrong in Washington," end quote. Find out which newsmaker said it and why, coming up after this quick break.
I know. Your wife or your husband probably said it to you last night while watching everything that's going on. But, no, this is some specific.
It's 10 minutes after the hour.
(COMMERCIAL BREAK)
VELSHI: It is 13 minutes after the hour.
Now, back to our quote of the day, quote, "There's something profoundly wrong in Washington," end quote. New York City Mayor Michael Bloomberg said this about the debt debate. Listen.
(BEGIN VIDEO CLIP)
MAYOR MICHAEL BLOOMBERG (I), NEW YORK: The United States of the America has come this close to defaulting on its debts, a failure that would have disastrous economic consequences for all of us, including New Yorkers -- ought to be all the evidence anyone needs that there's something profoundly wrong in Washington. Just the fact that we're talking about the possibility of default is putting doubts in minds of people around the world that will stay there for a very long time.
(END VIDEO CLIP)
VELSHI: All right. Is Captain America going to save us from the debt debacle?
Here's your morning punch line.
(BEGIN VIDEO CLIPS)
JAY LENO, "THE TONIGHT SHOW WITH JAY LENO": "Captain America," the number one movie in the country, the good news, it made $65 million. The bad news, "Captain America" owes captain China $14 trillion.
UNIDENTIFIED MALE: Can a deal be reached or is this atmosphere just poison?
JON STEWART, "THE DAILY SHOW WITH JON STEWART": Captain America!
(CHEERS AND APPLAUSE)
STEWART: We raised the debt ceiling 17 times under Reagan, five times under H.W. Bush, four times under President Bill Clinton, seven times under G.W. Bush. So, apparently, for past congresses, accomplishing a debt ceiling raise is as effortless as this.
LENO: There's Nancy Pelosi, John Boehner. OK? Go over there. There's Harry Reid. There's Mitch McConnell. Freeze it right there. OK?
Harry Reid and Mitch McConnell can't agree on a budget? They obviously agree on everything else. Look at them. Look, same hair, same glasses, same sport coat, same shirt. Why can't you agree on this?
(END VIDEO CLIPS)
VELSHI: All right, time now for your Political Ticker with Tim Farley, host of "Morning Briefing" on Sirius XM POTUS, joining us live from Washington today.
I don't even know the question I can ask you this morning, Tim. I just don't know.
TIM FARLEY, SIRIUS XM POTUS: Why, Ali, my twin brother.
VELSHI: Yes. There you go. What is it going to take? What are they going to do? When is that going to happen?
FARLEY: You know, I kind of go to the David Gergen because he's so smart about this, that there's going to be some sort of short-term thing. And I said this yesterday. My belief is that the president has to sign something to avoid the default.
I also think that when Jessica Yellin reported this last night, and Major Garrett is reporting this in "The National Journal," something that the president did not say last night, he did not use the word veto, which means that in some ways, he's got an escape clause -- if he has to sign something a bit distasteful just to avoid the worst that could happen, which would be to default on the debt and to be forced to make spending cuts in areas that he doesn't want to cut.
So, I do tend to lean toward that short term. How we get there is still a question mark. And that I think pretty much is the consensus in Washington, D.C. right now is we just don't know.
VELSHI: And, Tim, one of the thing is complicating this particularly on the Republican side, given the influence of the Tea Party, given the influence of these candidates who have signed no tax pledges, is that there's a presidential campaign -- nomination campaign still going on and it's heating up in Iowa right now.
FARLEY: Exactly. And we heard a bit of partisanship last night. There's an awful lot of it going on in Iowa -- some things to watch. Michele Bachmann and Tim Pawlenty have been trading some punches recently, which sort of indicates that perhaps Michele Bachmann is feeling a bit of pressure from Tim Pawlenty.
Chris Christie, governor of New Jersey, was in Iowa in yesterday for an education conference and he said he didn't see any of the candidates who really excited him.
The Ames straw poll is in just a few weeks, on August the 13th, and there will be an open ballot. That means that Governor Perry, who's not a declared candidate, Governor Perry from Texas, could wind up getting some votes, could do well.
Lot of fund-raising, lot of campaigning today in Iowa. Jon Huntsman is in New Hampshire. Mitt Romney, on the other hand, is in Washington, D.C. at a Lawyers for Romney luncheon. So, you figure out the tea leaves from there, Ali.
VELSHI: Yes, no kidding. All right. Tim, thanks for that. We'll keep on talking with you. Tim Farley is the host of "Morning Briefing" on Sirius XM POTUS -- Tim, have a good show this morning.
FARLEY: Thanks.
VELSHI: So, even if lawmakers come to a debt ceiling agreement by August the 2nd, there are two major credit agencies threatening to downgrade our AAA credit rating. That has never happened to the United States before.
So, what would that look like? Well, treasury rates, bond rates could go up. Now, ultimately, that could end up affecting your house, credit card.
Let's play that scenario out a little bit, looking at just one slice of the pie. Your home loan -- assuming you got a variable rate loan -- you might see interest rates go up on your mortgage. For those homes that aren't sold, more homes may end up sitting on the market. And prices on old homes could slide even further in this already depressed market or unsold homes.
The only silver lining is for long term investors who see a buying opportunity.
If you want more information about how a debt downgrade or a debt default in the United States could affect you, your car loan, your student loan, or anything else, your investments, your 401(k), your IRA, head to CNNMoney.com. There's a lot on there about how this is all going to affect you.
The all-new electric Nissan Leaf won the government's top crash safety rating, earning five stars for overall safety from the National Highway Traffic and Safety Administration. That puts the Leaf on par with its main competitor the Chevy Volt, which is a plug-in with a gas backup. Both cars have also been named top safety picks by the privately funded Insurance Institute for Highway Safety.
Two out of every three New York City roof tops are thought to be suitable for solar power according to CNN Money. So, now, the city is working on harnessing that potential and turning it into electricity to keep the city humming.
City hall say there is a slew of initiatives on the table. A hyper accurate mapping system to pinpoint solar power potential from building to building, or putting solar farms on old landfills, financial incentives on top of existing state and federal subsidies, and streamlining of the solar power permit bureaucracy.
And if you're looking for that elusive Facebook iPad app, it is closer than you might think. Can you say iPhone? Tell you about that when we come back.
But, first, it is National Day of All or Nothing. So, go big or go home.
Twenty minutes after the hour.
(COMMERCIAL BREAK)
VELSHI: Twenty-two minutes after the hour.
Here are three things you have to be on your radar today:
We are watching and waiting for developments on Capitol Hill. The debt ceiling negotiations don't seem to be going anywhere. I'm hoping there's a lot of backdoor negotiations going on. And as soon as something happens, we'll bring it to you.
At 10:00 a.m. Eastern, the U.S. Postal Service is set to release its list of post offices that could be shutdown. We're talking about more than 3,600 offices located in small communities.
Also at 10:00 a.m. today, July's consumer confidence report will be released. Some experts predict it's not going to look so good.
All right, let's go around the world.
Zain Verjee live right now in London.
A big human trafficking raid, Zain, in Mexico, over a thousand people arrested, 20 girls rescued. This is huge. What happened?
ZAIN VERJEE, CNN INTERNATIONAL CORRESPONDENT: It is. Police basically raided bars, hotels, boarding houses, and they arrested a thousand people, about 500 men and 500 women, and they rescued 20 female miners. All part of Mexico's AMBER alert program. And basically, it's dedicated to try and find missing children.
This happened in Ciudad Juarez, just on the border with Texas -- Ali.
VELSHI: All right. And, Zain, which Dan Brown book was this that I read about, there's big atom smasher under Switzerland somewhere, there's reality. It's part of the search for the so-called "God particle." And, apparently, this is developing. This isn't just the stuff of novels.
VERJEE: Yes. They are actually looking for the "God particle."
Basically, scientists deep under ground in Switzerland are -- this is what they want to do, they want to crash two beams of particles really quickly in opposite directions at the speed of light and hope that they extract this "God particle."
They're saying, Ali, that they're pretty close to finding it. And by the end of 2012, it could happen.
And if it does happen, it would be incredible because the idea is to recreate a mini big bang and it would answer questions like how did the universe start? What is the universe made of? Who are we? How did we get here? All that existentialist stuff that you like to think about all the time.
VELSHI: And a huge source of energy if this is what we expect to be a huge renewable source of energy.
VERJEE: Right.
VELSHI: I think it was "Angels and Demons," my producer Christina is telling me.
VERJEE: All right. I only read "The Da Vinci Code."
VELSHI: We will keep a close on this.
VERJEE: I can tell you about the Knights Templar. All right.
VELSHI: You could. Well, maybe we'll do that the next time we talk. Zain, good to see you, my friend. I will check in with you later -- Zain Verjee in London.
Hey, listen, they haven't seen it. They haven't touched it. They haven't tried it. But consumers are already getting excited about the iPhone 5.
Price Grabber just did a survey and found more half those asked plan to buy the new smartphone in the first year that it is out. Thirty-five percent as soon it hits the shelves. When is that going to be? Apple is not saying.
This is the first time this year in June that they didn't come out with a new one. So, hopefully, some time soon.
Get a load of this. See what those gloved hands are holding. That is a transparent lithium ion battery. Some researchers at Stanford came up with it. They say it costs about the same as regular batteries, which means down he road, see-thru cell phones.
Fear not, you can still call it to help you find it if you lose it.
If you've been losing sleep waiting for that Facebook iPad application, the wait is over, kind of. It seems a version of the app is already running, hidden inside the iPhone app. Techies who have seen it say it looks more modern than the old iPhone version. The official launch is still somewhere down the road. You can go to CNN.com for the links that will get you off and running.
All right, moved to downtown Detroit, get paid thousands of dollars. Sounds pretty good, right? There are some requirements, however. That's deal on the table for thousands of Motor City workers. We'll spell out the plan in just a few minutes.
But, first, today's "Businessman Special" is a rubber duck. We'll tell you why after this quick break.
Twenty-six minutes after the hour.
(COMMERCIAL BREAK)
VELSHI: Good morning. It's Tuesday, July 26th. This is your A.M.: WAKE-UP CALL.
I'm Ali Velshi, joining you live from New York this morning. It's 30 minutes after the hour.
Let's get right through it.
President Obama versus House Speaker John Boehner, the debt ceiling hit primetime last night, dueling speeches on the debt crisis. They criticized each other, sparring over competing plans. President Obama still wants a long-term solution. Speaker Boehner is pushing for a two-step plan, increasing the debt limit in steps. And Congress can't still find common ground.
(BEGIN VIDEO CLIP)
OBAMA: But do you know what people are fed up with most of all? They're fed up with a town where compromise has become a dirty word.
REP. JOHN BOEHNER, (R) HOUSE SPEAKER: The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today. This is just not going to happen.
(END VIDEO CLIP)
VELSHI: In one week on August 2nd, America may not be able to pay all of its bill. So, what about all this back and forth? Here's chief White House correspondent, Jessica Yellin's take.
(BEGIN VIDEO CLIP)
JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: The bottom line is it was about point scoring for both of them, playing to their base, trying to get their own teams to fight the other, and all of this spells impasse with about a week to go. This doesn't move the ball forward.
(END VIDEO CLIP)
VELSHI: Coming up in the seven o'clock hour of "AMERICAN MORNING," I'll talk to Gene Sperling. He's the director of the National Economic Council and assistant to the president for economic policy. I'm going to ask him what is next in this fight.
The hotel maid accusing Dominique Strauss-Kahn of sexual assault will meet with prosecutors tomorrow. The 32-year-old woman is speaking publicly for the first time about the former IMF chief and what she says happened in that Sofitel Hotel room back in May. She says she was afraid she'd be killed for accusing him, but Strauss-Kahn says the encounter was consensual. And the accuser's credibility has been called into question in recent weeks.
Anderson Cooper talked to the "Newsweek" reporter who interviewed the maid asking whether her story seem believable.
(BEGIN VIDEO CLIP)
CHRISTOPHER DICKEY, NEWSWEEK & THE DAILY BEAST: I thought she was very believable when she was talking about the incident itself, the alleged attempted rape and sexual assault. Not only because she told that story consistently many, many times, but also because we know that almost all the physical evidence or all of it supports her case.
(END VIDEO CLIP)
VELSHI: Strauss-Kahn is charged with sexual abuse and attempted rape pleading not guilty on all counts.
A small private funeral was planned today for singer, Amy Winehouse. Still, no clear indication of what killed the 27-year-old five-time Grammy award winner. An autopsy did not establish a formal cause of death, and toxicology tests could take weeks. But, if you need proof of Winehouse's worldwide impact. Here it is. There's been a 37-fold increase in her album sales since Saturday when she was found dead. Now, fans and music experts are clamoring for the release of a reportedly unfinished third album.
(BEGIN VIDEO CLIP)
GENNARO CASTALDO, HMV: I'd be surprised between now and this, there was some kind of album (ph) coming out, because the demand would be absolutely huge.
(END VIDEO CLIP)
VELSHI: Winehouse hadn't released an album in four years.
The IRS is changing its rules to help innocent spouses who didn't know about their husbands or wives cheated on their tax debt. The innocent spouse allows taxpayers to get some relief if they sign a joint return. Starting now, the agency is scrapping a rule that disqualify taxpayers from the innocent souse status if they failed to file for relief within two years.
All right. Moving to a apartment in downtown Detroit, get paid $2,500 toward rent via Home There (ph) and qualify for a $20,000 forgivable loan. You know, the kind that you don't have to pay back if you meet all the requirements. That's the deal on the table for thousands of workers at five major companies in the Motor City.
The Live Downtown Program is meant to bulk up the population of greater downtown Detroit, and it's modeled up for the popular live midtown mission that launch earlier this year. Let's go to Christine Romans live here in New York. Good morning, Christine. You know, we should probably clear this up because a whole bunch of people are saying, if there's no deal tomorrow morning, markets are going to be tank., And we've been hearing this. We heard it on the weekend. We heard it tonight. Markers didn't tank. Asian markets closed higher. Why?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, you know, markets think that's something going to happen, Ali. They think that, you know, Washington is not going to shoot itself in the heart even though they're very concerned about the long-term fiscal health of this country. They think that something's going to happen. Also, when we say markets, what do we mean? We mean stocks? We mean bonds? We mean the dollar? We mean currencies? We mean commodities?
All of these markets are acting a little bit differently depending on what the mood of the moment is and that's what kind of makes this so exciting to follow them, right? So, we're looking at stock index futures right now.
VELSHI: Yes.
ROMANS: They're moving up a little bit. That's because, again, markets are saying watching carefully to see what happens next. They think there's going to be either a two-tiered deal or Wall Street thinks maybe Harry Reid plan might actually go through. Not clear -- look, still waiting is what we're doing here.
VELSHI: Yes. And on top of that, we have earnings. We're in the middle of earning season, basically, the report card for companies in America.
ROMANS: That's right. And 41 S&P 500 companies are reporting their earnings today. And interesting because what they're reporting, many of them, is that their profits are going up. Their revenues are going up. They've held cost down to the bone for a very long time. They're so concerned about the economy.
But they're managing to eek out some gains. So, we'll be watching today for -- let's see Glaxo, Ford, RadioShack, as I said, some 41 different companies. Amazon also on here. So, we'll be hearing from those different kinds of -- you know, a different pulse on different parts of the economy later on today.
VELSHI: All right. Going back to your distinction between markets, you know, what are we talking about when we're discussing it. Stock markets seem to be doing OK. The dollar and treasuries, however, are sinking while these debt talks drag on.
ROMANS: That's right. And I think that's where you're going see the real reaction. I mean, look, we're looking at a ten-year note yield, you know, that's been hovering around three percent. Three percent for ten-year money. I mean, can you imagine? I mean, you would have thought in all of these months of concerns about our fiscal problems that those yields would have moved higher, but they really haven't. And one of the reasons and this is a fascinating discussion going on to the market this morning and for the past couple of days, Ali, what happens with yields if there's not a deal? Do you see yield spike higher and bond prices tank, or, ironically, do you see a fly (ph) to quality into the very instrument at the center of this entire drama. So, that's kind of an interesting thing that's playing out. A lot of people --
(CROSSTALK)
VELSHI: Makes it clear that we don't know what's going to happen. So, everybody who says they do, they're smarter than we are. Christine, good to see you. I'll see you on "American Morning" very shortly.
ROMANS: Yes. Bye-bye.
VELSHI: Now, back to today's businessman special. The rubber duck, we're highlighting the duck because it helped a Colorado couple bring in million in sales. This is the Quacker Gift Shop. The great folks at CNNMoney.com asked the owners of the rubber duck theme chap (ph) how you turn a $2 duck into a multimillion business? They said you grab all to something people and remember and you leverage that. Talk about leverage, rubber ducks became popular in the 1970s after Ernie from "Sesame Street" made famous the song, "Rubber Duckie."
And today's "Get Smart" question, what percentage of American men are not working? Ten, 20 or 30 percent. What percentage of American men are not working? The answer after this quick break. It's 37 minutes after the hour.
(COMMERCIAL BREAK)
VELSHI: Forty minutes after the hour. Now, back to our "Get Smart" question. What percentage of American men are not working. Ten, 20 or 30 percent? The answer is b, 20 percent. One out of every five men are not working according to "Fortune" magazine. They are, quote, "either collecting unemployment, in prison, on disability, operating in the underground economy, or getting by on the paychecks of wives or girlfriends or parents."
Now, time for our "Political Ticker." Let's bring in our White House correspondent, Dan Lothian. He's on the phone from the Washington. Dan, you were watching it last night as we were, the president's speech, then John Boehner's response to it. What do you make of what's going on today in Washington whether a deal is within reach?
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT (on the phone): Well, you know, it looks very difficult now for this deal to happen. You know, at this point, you would expect that there would be some kind of compromise, some kind of leaning towards an agreement, but it almost feels like there's a broken record here. I mean, the narrative really hasn't changed over the last few months.
Republicans are digging in saying that, you know, they don't want any kind of plan that calls for tax increases, and the president is saying that you need some kind of revenue that wealthy Americans need to carry some of the burden here that any kind of deal should not impact a hardworking middle-class Americans and senior citizens. And so, what you have now are essentially two different plans.
Harry Reid's plan, which is looking at raising the debt ceiling through the end of 2012. You have John Boehner's plan, which is looking at sort of a two-tiered system, raising the debt ceiling through this year and then raising it again in 2012. So, you know, you have one side calling it an impasse, the president saying that last night. John Boehner saying it's not a impasse.
They have agreement, a bipartisan agreement. So, a difficult situation, but one thing everyone realizes is that the clock is ticking. Time is running out. And the consequences of not acting are immense.
VELSHI: Yes. Could be catastrophic. It could be calamitous. Dan, we'll continue to talk to you through the course of the morning and on "American Morning" in just a few moments. Dan Lothian, our White House correspondent.
Here are three things that you need to have on your radar today.
At 10:00 a.m. Eastern, new home sales numbers for the month of June are set to be released. Experts predict they'll increase just a little bit.
Also at 10:00 a.m. this morning, U.S. Postal Service set to release its lists of post offices that could be shut down. We're talking about more than 3,600 offices located largely in small communities.
And one more thing at 10:00 a.m., July's consumer confidence report will be released, and some experts predict all consumers are going to be less confident than we anticipate.
Hey, maybe, if we have more football players and owners in Washington, this debt ceiling deal would get done. The NFL players and owners manage to resolve their money differences and end the lockout. So, the U.S. might not be able to pay its bills on time this fall, but at least, we'll have pro football. Here's the head of the players association.
(BEGIN VIDEO CLIP)
DEAMURICE SMITH, NFL PLAYERS ASSOCIATION: I believe it's important that we talk about the future of football as a partnership, but I'm proud of the men that you see behind me. I'm proud of the former players who stood with us, and most of all, I dig our fans who love our game.
(END VIDEO CLIP)
VELSHI: And if you thought Talladega nights was just a movie, listen to this prayer before a race at the Nashville speedway. (BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Thank you for Sunoco racing fuel and Goodyear tires that bring performance and power to the track. Lord, I want you to thank you for my smoking, hot wife tonight, Lisa, and my two children Eli and Emma, or as we like to call them the Little E's. Lord, I pray you bless the drivers in uniform tonight. May they put on a performance worthy of this great track. In Jesus' name, boogity, boogity, boogity, amen.
(APPLAUSE)
VELSHI: Boogity, boogity, boogity, amen. And as a matter of fact, Pastor Joe Nelms did get the idea from the movie, "Talladega Nights." That was a prayer.
Before we go, here's a look on this date in history, on July 26th 1948, President Harry Truman signed an executive order ending racial segregation in the armed forces. Twenty-four minutes after the hour.
(COMMERCIAL BREAK)
VELSHI: Forty-seven minutes after the hour. Good morning. It's Tuesday, July 26th. This is your A.M. WAKE-UP CALL. I'm Ali Velshi joining you live this morning from New York.
Let's go right around the world with Zain Verjee. She's in London right now. Zain, what a remarkable story developing that's developing a big human trafficking raid in Mexico. Tell us about it. Over a thousand people arrested?
VERJEE: Yes, exactly. That's right. This happened in Ciudad Suarez, about 500 men and 500 women. Police raided for about nine hours, bars, hotels, and boarding houses, and they managed also to rescue, Ali, about 20 female miners. This is all part of a big operation on human trafficking and cracking down that Mexico has been pursuing. They called it "Operation Amber Alert," a program that essentially created to try and find missing children -- Ali.
VELSHI: All right. And let's talk about another topic that we're dealing with today, Amy Winehouse, we're expecting her funeral to take place.
VERJEE: Yes.
VELSHI: It's going to be a small event. Still, the results of her death not conclusive.
VERJEE: No, they're not conclusive. The autopsy has been done. What the police here are saying, Ali, is that it's going to take at least any time between two to four weeks for them to get the results of further toxicology test. But the funeral today, she's Jewish, and in that (ph) tradition, they do funerals as soon as possible. It's going to be today.
And, there only going to be family and close friends. We don't know any details. There was talked about to even she, maybe, (INAUDIBLE) Jewish customs, but it's not clear any of the specifics about it, but it is going to be today as what we've been able to confirm. And you know, Ali, her album "Back to Black" is shooting very rapidly up the charts again both in the U.S. as well as here in the UK. And, you know, she had a third album that she was working on and that's likely to be released as well, and it will probably do pretty well -- Ali.
VELSHI: I mean, everywhere you go, when you're listening to news, you're going around places, you're hearing her music now. Lot of it being played.
VERJEE: Yes.
VELSHI: And it is so distinctive, obviously. You know that it's Amy Winehouse. Even if you weren't a big fan of hers, as you and I talked yesterday, we both are, she doesn't sound like anybody else. And her distinctive sound is being played a lot. Zain, thanks very much. We'll check in with you on "AMERICAN MORNING." Zain Verjee in London.
All right. One morning, I'm going to tell you that the whole debt ceiling mess is over. Sadly, this isn't it. The deadline to raise the debt limit is one week from today. The president and the House Speaker stated their cases to the nation last night. The two men, the two parties are not on the same page. They may not even be reading from the same book. So, what happens today? That's anyone's guess. Here's the president, the speaker, and then a quick word from senior political analyst, David Gergen.
(BEGIN VIDEO CLIP)
OBAMA: But the new approach that Speaker Boehner unveiled today, which would temporarily extend the debt ceiling in exchange to spending cuts, which force us to once again face the threat of default just six months from now. In other words, it doesn't solve the problem.
BOEHNER: I want you to know that I made a sincere effort to work with the president, to identify a path forward that would implement the principals of cut, cap, and balance, in a manner that could secure bipartisan support and be signed into law. And I'll tell you, I gave it my all. Unfortunately, the president would not take yes for answer. Even when we thought we might be close to an agreement, the president's demands changed.
GERGEN: Or ultimately, horses you can't ride all of the way to the finish line, and the issue becomes, what comes after them and can you get it done before Monday or Tuesday of next week? I think we're heading toward two-week, three-week extension of this fight. I think the president will accept some sort of an extension for two to three weeks to allow this fight to play out.
(END VIDEO CLIP)
VELSHI: In his speech, the president asked people to pressure their congressmen or woman to compromise. What happened? House and Senate websites crashed left and right. Most of the sites are back up this morning, however.
Let's talk quickly about the suspect in the Norway massacre. Anders Breivik is spending his first full day in solitary confinement. He reportedly admitted at a court hearing that he carried out Friday's rampage that left 76 people dead. A judge says Breivik claimed the attacks were to combat the, quote, "colonization of Norway by Muslims." The suspect's father is a retired diplomat living in France. He says his son must be mentally ill.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (through translator): No, I'll never have more contact with him in my darkest moments. I think that rather than killing all those people, he should have taken his own life.
(END VIDEO CLIP)
VELSHI: Judge ordered Breivik held in custody for at least eight weeks until his next court appearance.
OK. I'm going to put a monster sum of money on the screen with lots of zeros. Take a look. $130 billion. You know what that is? Roughly, the Gross Domestic Product of New Zealand. And I'm not going to talk about the debt ceiling. This is the amount of money U.S. businesses will spend this year dealing with data breaches, hacking, cyber crimes, and other virtual violations. The security research company that came up with the number says that's more than triple what companies spent just five years ago.
Now, let's go to Jacqui Jeras live from Atlanta. Jacqui, yo're looking at flight delays this morning.
JACQUI JERAS, AMS METEOROLOGIST: I know. We're expecting a lot of them today, Ali. Most of them in the afternoon and mostly due to thunderstorms that are going to pop up and bring some heavy downpours, and then, it takes the plane to longer to shoot that approach, and sometimes, they have to delay as a result. New York and Boston, expecting some low clouds this morning. Atlanta, New Orleans, those at least could be heavy this afternoon.
Miami, Tampa and Florida, at least somewhere between 30 minutes or so, maybe up to 60, and Denver looking for some thunderstorms. A little fog out there in San Francisco. Go figure. Some of the thunderstorms could be severe later today across the upper Midwest and the northeast, but hopefully, they'll steer clear of some of these bigger cities.
Heavy rain and sort of (ph) flooding right along the Gulf Coast with up to two inches per hour at times. The temperatures staying hot across the nation's mid section, but the northern tier getting that nice break. Ali, a little off the beaten path here, but do you have dog?
VELSHI: I've had dogs in the past, but I don't have one now. Love dogs.
JERAS: And do you think they're smart?
VELSHI: I do think they're smart.
JERAS: Everybody thinks our dogs are smart, right?
VELSHI: They're smarter than me in most cases.
JERAS: You know what, a new study, a research says that dogs now have the developmental ability of a two-year-old.
VELSHI: Ha!
JERAS: A two-year-old. They can learn as many as 165 words.
VELSHI: The dogs I've had --
(CROSSTALK)
(LAUGHTER)
JERAS: But you can teach it, right? Commands up to 165. So, we are not -- man's best friends, they're not living up to their ability.
VELSHI: Are these dogs we're showing on the screen, are these CNN dogs? Are these our crews' dogs?
JERAS: I have no idea, but they're all so cute. Oh, they are. Yes.
VELSHI: It's one of the things. Living in Atlanta, a lot of my colleagues have dogs. People have space, you know, more than they do here in New York. Love dogs. Two years old. 165 words. I'm going to go home and teach other people's dogs words I'm sure they don't know. Jacqui, good to see you this morning
JERAS: OK.
VELSHI: We'll see you on "AMERICAN MORNING."
Hey, time to look at the word of the day. It's actually two words today, bond auction, and no it's not an auction for some James Bond movie memorabilia. Find out what it means and why you need to know it right after this short break. It is 53 minutes after the hour.
(COMMERCIAL BREAK)
VELSHI: Fifty-seven minutes after the hour. Now back to the word of the day, bond auction. It is the regular process by which the government actually raises money. Investors basically buy up a hunk of government debt in competitive bids, kind of like eBay, but it happens in person. So, Uncle Sam has to unload bonds at a price that will make buyers willing to bite. If prices deep because demand for U.S. bonds goes down, interest rates spike. That costs the government more money, and ultimately, it costs you and me more money, too. So, why do we care right now? Because two credit agencies are threatening to downgrade U.S. debt. If that happens, brace yourself for a big-time drop in the value of our bonds at auction.
All right. Before you head out the door, what's in store for U.S. markets today? Let's go right to Carter Evans. He's live in New York at the NASDAQ market site. You're looking at lot of things today, earnings and economic indicators, Carter.
CARTER EVANS, CNN BUSINESS CORRESPONDENT: Yes. We've got some economic news today, Ali. The Case-Schiller 20 City Home Price Index were expected to see a decline of about 4.5 percent. We're also going to get a read on how people are feeling about the economy with the consumer confidence numbers. And new home sales, we're expecting a slight decrease there. Let me show you what's going on on CNNMoney.com today.
Of course, this is the lead story, Obama's big pitch last night. You're probably going to see debt ceiling on the front page for the next couple of days, at least, until some sort of deal has reached. Kind of more the same, though, Ali. I mean, it's basically we're hearing the same thing over and over again. A lot of economists are saying our politicians are using the debt ceiling as a way to get their political needs fulfilled. It's frustrating to a lot of people.
VELSHI: As much as I spend a lot of my time on CNNMoney, I'm telling people as much as I can these days, go there, because it's kind of a lot of the same, but it's a lot of very specific explanations as to what happens to your money, what happens to your investments, what happens to your loans, and all of those things in the event that there is some sort of a default.
So, it's helpful information for everyone to have. So, you're going to be watching that. You're watching a bunch of earnings as well today. It's going to be a busy day on Wall Street, and the result might be because of debt debate and might be because of other things as well.
EVANS: Yes. We also heard from Netflix after the closing bell. Now, if you follow Netflix at all, you know this stock has been on fire for the last year or so. It reached 300 last week.
VELSHI: Wow!
EVANS: But last night's numbers, yesterday's numbers disappointed investors. Revenue came in short. The stock is down 10 percent in the pre-market today. And Netflix customers are furious with the company right now, because the company just raised prices by 60 percent. So, that's very frustrating. Finally, today, gold at an all all-time high, near $1,615 an ounce. It touched $1,624 yesterday. People rushing to the proceed safety of gold.
VELSHI: Yes. EVANS: In this uncertain market, Ali.
VELSHI: Carter, I'm one of those Netflix customers who's mad about the fact that not only did they raise prices, they did so without -- that you get to opt out. If you don't do anything, you pay the higher prices. Carter, we'll check in with you today and every morning on WAKE-UP CALL.
Hey, listen, as the debt debate draws fire, comedians just want to know, can't we just all get along? Here's your morning punchline.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We've raised the debt ceiling 17 times under Reagan, five times under H.W. Bush, four times under President Bill Clinton, seven times under G.W. Bush. So, apparently, for past Congresses accomplishing a debt ceiling raise is as effortless as this.
UNIDENTIFIED MALE: Nancy Pelosi, John Boehner, OK. Keep over there. There's Harry Reid. There's Mitch -- freeze it right there. Freeze it right there. OK? Harry Reid and Mitch McConnell can't agree on a budget. They, obviously, agree on everything else. Look at them. Look. Same hair, same glasses, same sport coat, same shirt! Why can't you agree on this?!
(END VIDEO CLIP)
VELSHI: And that's it for us. "AMERICAN MORNING" continues right now.
