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Feds Loan Ailing AIG $85 Billion; Health Conditions Dangerous in Hurricane Affected Areas; Stripper Well Owners Say Technology Could Increase Output

Aired September 17, 2008 - 13:00   ET

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

(BEGIN VIDEOTAPE)
FREDRICKA WHITFIELD, CNN ANCHOR (voice-over): Bailing out the country's biggest insurer will cost plenty, but leaving it to die could have cost a lot more. AIG, a company just to big to fail.

LARRY KING, CNN ANCHOR: Should people take money out of the bank?

SUZE ORMAN, PERSONAL FINANCE EXPERT: Are you kidding?

WHITFIELD: That's Suze Orman for you, cutting through the Wall Street speak and telling you what you ought to be doing and not doing with your money, right now.

Plus, drill, baby, drill. Right in your back yard. These mom and pop oil wells are everywhere and could be pumping a lot more oil out of the ground. So what's holding them back?

(END VIDEO CLIP)

WHITFIELD: Hello, everyone. I'm Fredricka Whitfield, in for Kyra Phillips, live at the CNN world headquarters in Atlanta.

AIG was sweating bullets for a while. The country's biggest insurer was on the brink of collapse. But once again, Washington has come to the rescue. The Federal Reserve board will loan AIG up to $85 billion. Uncle Sam gets a nearly 80 percent stake in the firm, in return.

And the feds say if they had let AIG go under, there would have been a serious ripple effect on Wall Street, on the markets that are jittery enough as it is.

AIG has more than $1 trillion in assets and 74 million clients across the globe.

The AIG interventional follows a dramatic few days on Wall Street. We're going to check in with Susan Lisovicz at the New York Stock Exchange in just a moment. But first let's talk with senior correspondent Allan Chernoff. He's at the AIG building in New York.

What are people saying?

ALLAN CHERNOFF, CNN CORRESPONDENT: Well, people over here, as you might imagine, are pretty happy. Happy faces over here, the employees. They still have a job. Also, policyholders of AIG, the millions around the globe, they're pleased as well. But what about the rest of us? I mean, why did the government do this?

The reason -- and the government did not want to do this -- the reason is that the government was basically trying to save the economy, not only in the U.S. but globally. Yes, that's how big this operation is.

Think of the financial world as a human pyramid, and AIG is one of the pillars. A pillar, because it had written so much insurance coverage, and that coverage includes protecting investment firms that had bought into very risky mortgage securities, securities that have plummeted in value.

So if AIG went over, there would be billions of losses at financial firms around the globe. That would have tightened credit. It would have made it much tougher to get a loan, not only for individuals but for corporations. And that would have seriously depressed the economy. As if we don't need that sort of situation right now.

So what is the bottom line? Well, employees over here, I think, the bottom line is actually going to be good for us as taxpayers. Let's listen to one of them.

(BEGIN VIDEO CLIP)

CHERNOFF: Good use of taxpayer money?

BILL VELTO, AIG EMPLOYEE: That's yet to be seen. So, hopefully it is. I think is personally, but we'll see. As long as we do our job, and I think we will do our job.

CHERNOFF: So you think that taxpayers will end up getting a good deal here?

VELTO: Oh, I think so. I think so.

(END VIDEO CLIP)

CHERNOFF: The terms of this loan are very tough. AIG is going to be paying the government a high interest rate, plus for the $85 billion two-year loan, the U.S. government gets 80 percent of the nation's biggest insurance company -- Fredricka.

WHITFIELD: Very interesting. Thanks so much, Allan Chernoff.

Well, Allan says that people there at AIG are very relieved; however, the AIG bailout doesn't seem to give investors a whole lot of confidence today. Let's check in with Susan Lisovicz at the New York Stock Exchange. Why?

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, you know, it all comes down to one word, Fredricka. It's confidence. That was really one of the things that the Federal Reserve was trying to do: to try to restore confidence by shoring up this very, very critical company in the financial arena.

But the, you know, concern on Wall Street is that it's not over. Who's next, really, is the question that I'm hearing. I mean, AIG, after all, is a company that assessed risk. And what you're seeing right now is no one wanting to take any risks by exposing themselves to shares of financial companies.

AIG shares continue to collapse. They're down 38 percent right now. But Goldman Sachs, which is considered a rock star here on Wall Street, really didn't have that much exposure, comparatively speaking, to subprime mortgages. Its shares are plunging 23 percent. Morgan Stanley yesterday reported better than expected earnings, moved up its earnings by a day to try to calm down the markets, and its shares have lost a third of their value just today alone.

How's it playing out on Wall Street? Well, a broad-based sell- off. The Dow Jones Industrials right now are down 250 points, and that is actually well off its lows. At the lows of the session, Fredricka, the blue chips were down 399 points.

I should mention, AIG is a Dow 30 stock. So it certainly weighs on that index, but the NASDAQ and the S&P 500 are each down 3 percent, as well.

And just to give you a scope, an idea of the scope of this sell- off. For every stock that's advancing, there are 15 that are declining. So people are nervous, and I am squeezing my stress bull. Bulls are in short supply right now.

You know, basically, the concern is that we're going to see more distress from other financial companies, and Washington Mutual has been a source, a major source of concern. That big regional bank, its shares are down 10 percent. Its stock trading at $2.

WHITFIELD: Wow. And for a long time we've heard analysts say we're really still at the tip of the iceberg. You have to wonder what is next?

LISOVICZ: Yes. And you know, one other thing I want to mention, because this is something that a few people mentioned to me today. One of the things that also is undermining confidence today is that the share price of a conservative money market mutual fund -- those are considered very, very safe havens -- sell below $1. And investors often viewed them, like money market funds, the way they do their checking account. You don't lose money. You don't make a whole lot of money, but you don't lose any money. And when you break the buck, is this expression, it's called, it's very rare. It's doesn't happen essentially, and it really hurts investor confidence.

So that is also just one of the things that's contributing to the lack of confidence we're seeing, in addition to the fact that the Fed had to reverse its -- its statements from just earlier this week and come in to rescue AIG.

WHITFIELD: Yes. It's always been kind of sold, mutual funds, as kind of a safe bet. So that's not very comforting news at all. Susan Lisovicz, thanks so much on Wall Street.

LISOVICZ: OK.

WHITFIELD: All right. So in a few words, Uncle Sam is AIG's knight in shining armor. Bankrupt Lehman Brothers has Barclays Bank. The British firm plans to scoop up Lehman's North American investment banking and capital markets business for $250 million.

Barclays will pony up another $1.5 billion for Lehman's New York headquarters and a couple of data centers. This is all potentially good news for about 10,000 Lehman employees, worried about their jobs. The deal must clear bankruptcy court first, however.

Well, you've heard us say that it's your money bailing out AIG, but exactly how does that money get from you to them? Josh Levs follows the money for us in about 20 minutes from now.

International news now. Suspected Islamic militants armed with automatic weapons, rocket-propelled grenades and a suicide car bomb, attacked the U.S. embassy in Yemen today. Officials say at least ten Yemeni police and civilians and six attackers were killed. U.S. officials say no Americans was hurt. President Bush says the attack sends a clear signal to Americans.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This attack is -- is a reminder that we are at war with extremists who will murder incident innocent people to achieve their ideological objectives. One objective of these extremists is they kill. It's to try to cause the United States to lose our nerve and to withdraw from regions of the world.

And our message is, is that we want to help governments survive the extremists.

(END VIDEO CLIP)

WHITFIELD: The embassy has been targeted in four previous attacks in recent years, the latest being in March. Yemeni media say al-Qaeda-linked group Islamic Jihad in Yemen has claimed responsibility for today's attacks.

Concerning al Qaeda, the director of the CIA says Osama bin Laden is no longer believed to be calling the shots on a daily basis. Michael Hayden says that's because bin Laden must spend most of his time merely surviving.

Hayden says al Qaeda remains the greatest security threat to the United States, and he says capturing or killing bin Laden would still be a major blow to the terrorist group. Hayden also says al Qaeda is determined to acquire nuclear weapons and most likely would use them.

No gas, no power, no running water. And debris is everywhere. And now a big concern about diseases being spread in the wake of Hurricane Ike. That is the scene along the hardest-hit areas of the Texas Gulf Coast. It's so bad on the Bolivar Peninsula near Galveston the state's attorney general is trying to figure out how to legally force the holdouts to leave.

In Houston, Mayor Bill White is complaining that FEMA isn't bringing in relief supplies quickly enough. Homeland Security Secretary Michael Chertoff may get an earful today as he visits the region for the second time to check on recovery efforts there.

Well, in parts of the Midwest, a pretty wet, stinky mess there, and it's Hurricane Ike's fault. Rivers are on the rise after as much as ten inches of rain fell in some areas. And then in hardest-hit Indiana the governor declared two areas disaster areas.

Ike's impact is also causing some serious problems in Ohio, Illinois, Michigan and Kentucky. Hundreds of thousands of people in those states are still without power.

The aftermath of Ike, terrible flooding in the Midwest. A lot of talk about the weather front. Meteorologist Chad Myers joins us now from the CNN weather center.

Boy, this was a pretty nasty storm.

CHAD MYERS, CNN METEOROLOGIST: Fred, would you believe 75 mile- per-hour winds from Ike in Iceland?

WHITFIELD: Oh, my gosh.

MYERS: Iceland. That's how long it kept going.

WHITFIELD: It had staying power.

MYERS: Now, it didn't have a name at that point. It had become what's called a cold core, extra tropical, regular low pressure center. But by that time it still had that energy. That kind of worked out to that perfect storm, if you remember that movie where all those ships were lost and such.

But here we go. From Chicago and south of there, all of these green counties, those are all under flood warnings, which mean something in those counties out of its banks. A creek, a river, a stream, lake, whatever.

And still obviously around Houston, as well. An awful lot of flooding going on there.

And on the other side of the coin, very dry conditions in the Pacific northwest, causing a red flag warning and fire weather watches all across the northwest here. And this is not just in the forested areas but in the towns, as well. Because this has been so dry for so long, and the air is windy today, and until 11 p.m. tonight. Then the winds will eventually dry off.

Nice temperatures across parts of the country. Not really that summer day. Obviously, we're turning into fall now. Temperatures are in the 70s and 80s rather than the 100-degree range. And so soon -- soon we'll start to do that leaf watching, or as they say in the northeast, leaf peeping, as the colors begin to turn -- Fred.

WHITFIELD: And that's always such a great time, too.

MYERS: Yes. They're already starting in some of upper places up here in Vermont and New Hampshire. We're already seeing some color, believe it or not.

WHITFIELD: Yes. And it's already starting to feel so cool down south here.

MYERS: Yes.

WHITFIELD: Atlanta, 75. Gosh.

MYERS: That's a morning low. Not an afternoon high.

WHITFIELD: I know. It really is something.

MYERS: Yes.

WHITFIELD: All right. Thanks a lot, Chad.

MYERS: You're welcome.

WHITFIELD: All right. Well, thousands of people who fled their homes ahead of Hurricane Ike, well, they have no idea when they can return. Many of them children and right now it's important for their lives to be as close to normal as possible.

Schools in San Antonio and other area are now welcoming children as storm victims.

(BEGIN VIDEO CLIP)

PASCUAL GONZALEZ, NORTHSIDE INDEPENDENT SCHOOL DISTRICT: They're welcome as long as they're here, to be in schools. We prefer that they're in schools and not in a shelter, obviously.

SID LAWRENCE, COUNSELOR, BOB LEWIS ELEMENTARY: One of the best ways for people to handle stress and anxiety in a situation like this is to maintain as much routine as is possible.

(END VIDEO CLIP)

WHITFIELD: And another thing that makes it easier, the young storm evacuees, the school curriculum across Texas is the same. So they can actually pick up where they left off in their studies.

Offshore oil drilling, it's is a huge issue this election year, but did you know that there is another type of drilling that could produce a lot of oil that is being actually overlooked? We'll tell you about stripper wells and why they could be important to America's energy future.

And you've got money saved, even in these troubled times, so you want to no exactly what to do with it, where to put it. We'll get some tips from a financial expert.

But first, with Wall Street the way it is, lots of people have questions about money. Questions like, should you put your extra money in the market right now? Suze Orman's answer, right after this.

(COMMERCIAL BREAK)

WHITFIELD: All right. Before the break we posed this question right here: "I have some extra money. Should I get into the market right now?" Here's what Suze Orman has to say about that.

(BEGIN VIDEO CLIP)

ORMAN: It's not a good time to get in with brand-new money. I would let these markets kind of wash themselves out.

On the other hand, if you're investing in a 401(k), every month, with small amounts of money, that's OK. As long as you don't need the money for 10, 15, 20 years.

Or you just got an inheritance. You have $50,000. Should you be putting it in the stock market now? Are you kidding? These are the markets that you just sit and wait on the sidelines and stay away from them until everything works out.

(END VIDEO CLIP)

WHITFIELD: All right. There you have it. We'll have more of Suze Orman's answers to many more of your questions. Coming up in 30 minutes, this question: "If I have credit card debt, should I invest in the market?" Suze Orman coming up with a response on that.

All right. Talking tough in some battleground states. John McCain and Barack Obama trying to calm Americans' fears about the economy as they campaign in some key states. McCain is on the trail today in Ohio and Michigan. After a stop in Colorado, Obama is campaigning in another toss-up state, Nevada.

The election just 48 days from now. Well, fixing the nation's economic -- rather -- mess, both McCain and Obama say they are the man for the job. Well, here's what they're telling their voters in their latest campaign stops.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: In January I outlined a plan to help revive our faltering economy, which formed the basis for a bipartisan stimulus package that passed the Congress.

Senator McCain used the crisis as an excuse to push a so-called stimulus plan that offered another huge and permanent corporate tax cut, including $4 billion for the big oil companies but no immediate help for workers.

This March, in the wake of the Bear Stearns bailout, I called for a new 21st century regulatory framework to restore accountability, transparency and trust in our financial markets.

Just a few weeks earlier, Senator McCain made it clear where he stands. Quote, "I'm always for less regulation," unquote, and referred to himself as, quote, "fundamentally a deregulator."

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Senator Obama is not interested in the politics of hope. He's interested in his political future, and that's why he'll hurling in insults and making up facts about his record.

Today, he claimed the congressional stimulus package was his idea. That's news to those of us in Congress who supported it. Senator Obama didn't even show up to vote.

Talks a tough game on the financial crisis, but the facts tell a different story. Senator Obama took more money from Fannie Mae and Freddie Mac than anyone but the chairman of the committee they answer to. And he put Fannie Mae's CEO, who helped create this problem, in charge of finding his vice president.

(END VIDEO CLIP)

WHITFIELD: And they're not just talking economic issues on the campaign trail. It's what they're talking about in related ad campaigns, as well. Leading our political ticker, something you don't need to say if you're one of John McCain's top economic advisers.

Carly Fiorina told a St. Louis radio station that McCain's running mate, Sarah Palin, isn't qualified to run a major corporation. In a second interview, she broadened her answer to include McCain, Barack Obama and Joe Biden.

In her comments, Fiorina said running a country is not like running a company.

The McCain campaign wasn't too pleased with what Fiorina said and suggested she may be doing fewer interviews now.

Well, one of Hillary Clinton's top backers and fundraisers apparently won't be checking the box beside Barack Obama's name on election day. A spokesman for Lynn Forrester Rothschild said she will endorse John McCain today.

Rothschild is a member of the Democratic National Committee's platform committee. She told CNN earlier this summer that she didn't like Obama and considers him an elitist.

Well, picture this. Hillary Clinton and Sarah Palin at the same time? Well, it's not going to happen. At least not next week. Clinton was supposed to appear in New York City at a rally against the president of Iran, but the senator cancelled when she was told that Palin had also been invited, saying the event had become politicized.

Well, here's oil that's not coming from the Middle East, ANWR or offshore. It's coming from backyards across the country. So why aren't they part of the energy fix? And she's not just a big sister. This 9-year-old girl played a special role in the arrival of her new baby brother. We'll tell you how she helped deliver him.

(COMMERCIAL BREAK)

WHITFIELD: A moment ago, FEMA's Dave Lekey had this to say about Hurricane Ike-battered Galveston, Texas.

(BEGIN VIDEO CLIP)

DAVE LEKEY, FEMA: Unsuitable place for individuals to live. I don't think it's a safe place to live, because of health issues and because of medical issues. The medical capacity that's limited here right now.

Health-wise, still don't have running water. We don't have a sewage system. We do not have, on the island, electricity for the refrigerators to keep food safe. That is a setup for food-borne illnesses, for diarrheal illnesses.

When I talked to the individuals that are seeing patients over at the UTMB, the D-MAT, the Disaster Medical Assistant Team, they tell me that they have seen significantly more patients over the last 24 hours, and it's changed.

Initially, they were seeing individual that were getting refills for their medications. What they are seeing now are individuals with chronic diseases, and trying to get medical care. They're seeing a few individuals that are coming down with some respiratory illnesses, some coughs, et cetera, that they're seeing. They're seeing some minor trauma.

(END VIDEO CLIP)

WHITFIELD: All right. And homeland security chief Michael Chertoff among those expected to tour again the region there, battered after Hurricane Ike.

Meantime, the House passed an energy bill last night that clears the way for more offshore drilling. It would be permitted in areas between 50 and 100 miles offshore. House Speaker Nancy Pelosi calls the measure a new direction in energy policy. House Republicans have other words for it, like hoax and sham.

Many Republicans favor drilling outside a three-mile area. The bill faces a struggle in the Senate, and the White House also is opposed to it.

Hundreds of thousands of small oil wells are on dry land, scattered all across the country. Well, these so-called stripper wells pump out quite a bit of oil each year. The people who own them actually say that they could pump out even more with better technology. But for some reason they are being overlooked.

CNN special investigations correspondent Abbie Boudreau explains. (BEGIN VIDEOTAPE)

FRED FESENMYER, MINARD RUN OIL: All of our tank battery.

ABBIE BOUDREAU, CNN CORRESPONDENT (voice-over): Oil's in the blood of this six-generation family-run business.

(on camera) Do you think that when people hears the words "stripper well" they have any idea what that is?

FESENMYER: No. No, I don't think. And that's part of our message, to make the public realize that we are not the Exxons and the Mobils.

BOUDREAU: No, we're not talking about big oil rigs like the ones you see on TV. And, no, we're not in Texas, where most people think of oil. We're actually in a small town in Pennsylvania, where there are thousands of stripper wells, or small oil wells, just like this.

(voice-over) Some of these Pennsylvania oil fields go back more than 100 years. Individual wells can be active for decades, slowly pulling up leftover oil and gas. A typical stripper well pumps out less than ten barrels of oil per day, but it quickly adds up.

(on camera) This one pumps about two a day, two barrels a day?

FESENMYER: About two barrels a day.

BOUDREAU: But when you take two barrels a day and you multiply that by about 422,000 wells...

FESENMYER: Yes. That's significant. It's a part of a whole that's very significant.

BOUDREAU (voice-over): Combined, these stripper wells produce about 335 million barrels of oil each year. In 2006, stripper wells accounted for nearly 18 percent of total oil production in the U.S., according to the Stripper Well Consortium.

But the pump technology hasn't changed much over the years, and Joel Morrison, the director of the consortium, says because of that, a lot of oil is left in the ground.

JOEL MORRISON, STRIPPER WELL CONSORTIUM: If you have 50 to 60 percent of the oil still left in the ground, why can't we develop better technologies to get that out?

BOUDREAU: Technologies like this pump, which the manufacturer says can increase production by 100 to 300 percent. The pump uses no electricity. Instead, it uses the natural pressure of the well to lift up more oil.

MORRISON: Oil centers.

BOUDREAU: But for now, Morrison says too much oil in these old fields just sits in the ground untapped. He says too much attention is focused on offshore drilling...

MCCAIN: We need to drill offshore, and we need to do it now.

BOUDREAU: ... and windmills.

OBAMA: Renewables like wind power and solar power.

BOUDREAU: Morrison says it's easy to forget about small oil producers, but without them, he says gas prices would no doubt go up, again.

MORRISON: We don't even have to drill for more oil. Let's just use technology to get more of that oil out of the ground. It's an existing well. The footprint is already there.

BOUDREAU: Abbie Boudreau, CNN, Bradford, Pennsylvania.

(END VIDEOTAPE)

WHITFIELD: And some experts say if each stripper well produced just one extra barrel a month, that would equal two super tankers worth of oil imports a year.

Well, they can be a grade A nuisance for teachers: hovering moms and dads who go to the extreme to help their kids in school. Elizabeth Cohen will join us live with more on the so-called helicopter parents.

But first, with Wall Street the way it is, lots of people have questions about money. Here's one: "If I have credit card debt, should I invest in the market?" The answer, right after this.

(COMMERCIAL BREAK)

WHITFIELD: All right, 32 minutes after the hour. Here are some of the stories we're working on in the CNN NEWSROOM. Stocks fell sharply on Wall Street this morning on news the government bailed out the faltering insurance giant AIG. The Fed is propping it up with a two year, $85 billion loan and in return an 80 percent stake in the firm.

And standing in line for hours for food and other emergency necessities, that's the state for evacuees and survivors of Hurricane Ike along the Texas Gulf Coast. One official says as soon as distribution centers open the doors, they were overwhelmed by people in need.

At least 10 people were killed today in an attack on the American embassy in Yemen. Officials say it was carried out by suspected Islamic insurgents. Six attackers were killed. No Americans were hurt.

Well, you've heard us say it's your money bailing out AIG but exactly how does that money get from you to them? Josh Levs is here to explain how it goes. Kind of following the bouncing ball. Right, Josh? JOSH LEVS, CNN CORRESPONDENT: Fred, have you ever try to get economists to make a concept clear and simple?

WHITFIELD: No. That's why we're counting on you.

LEVS: You guys gave me a really tough task today. Thank you very much. We're doing it. And one of our producers had some inspiration from "Schoolhouse Rock", which you might remember.

So we also have cartoons to make this otherwise depressing news a little more interesting for you. Let's start out with the first one. Someone working. You work, you get paid. This is where the process starts. Let's go to the next one.

Because as you know, you pay taxes. Your money goes to the IRS. Now, in this next one, this is where the process starts to bring you up to today. When you pay your IRS your tax money it goes to what is called the Federal Treasury. The huge pile of money goes into the Treasury.

Now let's go to the next one. The Treasury issues these things called securities. I want to stay on this for a second. See those little pieces of paper culling out of the Treasury, Fred, those are securities that the Treasury issues. The Federal Reserve buys those securities and makes money off the interest on them, and that is responsible for the majority of the Federal Reserve's budget, or the largest segment of the Federal Reserve's budget.

So right there you get a link right there between your money and the Federal Reserve. The way that they operate is that they make lots of money, more than any other source, off of those treasury securities. Now, what happens in this next one where they see a desperate business, like today. And they decide we need to pour billions of dollars into this business to prop it up so that it doesn't fall apart. What do they do? Take some of their money and give it to the business. But look at how the arrows go both ways. This is the key. The business is then paying interest. Here we're talking about paying a lot of interest. As of today's figures, about 11 percent over two years is a lot of money.

So while they're giving money to the business, the business, of course, is paying back. The argument here, in the end, the taxpayers shouldn't actually be losing anything. The security, or the -- the Reserve should actually make money off of all that interest. If things go ideally, then that's how it will end up being. There you go. Shouldn't be a problem for taxpayers. They shouldn't be charged more, but conceptually things fall apart, it could be public money that gets lost.

WHITFIELD: Maybe comforting on the surface. But I guess what is so nerve-racking for a lot of folks we don't know how long this is going to carry on. When does the bottom pull up for the Federal Reserve to conduct such bailouts? Nobody wants to think that way, but how can you not?

LEVS: Absolutely. This is one of the big questions that a lot of people have. How much money can they keep giving away to bail out they companies before they start to lose? They have a ton of money. They hundreds of billions they can still operate with. If they keep doing this and do lose some of the money. The truth is because it's part of the federal government it is taxpayer money. Even though there's no announcement now and no economists are saying they're going to chase after us and make us pay more taxes because of it, the fact is no one knows what will ultimately happen if money is lost that is taxpayer money, then people have every right to be very concerned about that, Fred.

WHITFIELD: Absolutely. All right, Josh, thanks for breaking it down. Appreciate it.

Of course, everybody's really concerned about the money in their pocket. All Americans, all taxpayers. So we've been taking it some of the questions, and answering them as well. Here's the latest question. If I have credit card debt, should I invest in the market? Here's an answer from Suze Orman.

(BEGIN VIDEOTAPE)

ORMAN: Who has money in the stock market, really when you think about it. They have it in their 401(k). What do they have? They have credit card debt. At what interest rates? Eighteen percent. Want to make an 18 percent return on your money, pay off your credit card debt. Forget the stock market. So people have to be so careful here.

ANDERSON COOPER, CNN ANCHOR: It's crazy to invest money in the stock market, paying 18 percent on credit card debt and haven't paid that off.

ORMAN: But here's the really thing that will start happening to people. They're going to find they have credit cards, find they have credit cards they haven't been using that have no balances. From this they're going to find the credit card companies will close down these credit cards, they are going to close down your home equity lines of credit that's going to affect your FICO score. Interest rates that are going to go up. So you're going to find that credit is going to now decrease more and more and more. That's how it's going to affect the average person.

(END VIDEOTAPE)

WHITFIELD: That's a scenario, if you have credit card debt, that was financial adviser Suze Orman, you know her face, you know her voice, she was with Anderson Cooper and Ali Velshi last night. We'll hear more advice from her in the next hour. Here's another question. Say you're not the person who does have credit card debt but you have a little money in your pocket. What do you do with it? What's the best way to help it grow? Let's ask Farnoosh Torabi, she is a senior correspondent with thestreet.com and wrote the book "You're So Money." She joins us from New York. Good to see you, Farnoosh.

FARNOOSH TORABI, THESTREET.COM: Good to see you, Fredricka. WHITFIELD: All right, so what you do with the money depends on the age bracket you're in. So let's break it down that way. Say you're in your 20s, you don't have credit card debt but have some cash in I don't pocket. What's the best way to help it grow?

TORABI: Realize if you're in your 20s and debt-free, power to you, first of all. Second of all, realize this is now a time to seize the day. There are a lot of battered stocks out there. I'm not saying go and proceed blindly and just buy whatever you think is cheap. You've got to do your homework. You have to invest in the stock market as you would be committed to your favorite sports team. You need to be looking at their financial books, you need to be catching them in the news, you need to be listening to the conversations that they're having during earnings call.

You have to be very educated in picking your stocks, but the good news is you're young, you can create a nice diversified portfolio, you're buying the stocks on the cheap. Look at stocks that are low now because everyone is selling, but maybe stocks that don't really have a big correlation to the subprime market. So that's where you want to start your research.

WHITFIELD: Wow. Wow, so you have to become pretty knowledgeable and studied on that. You're in your 20s or early 30s. Stocks good but long-term, everybody else including Suze Orman saying stocks not so good.

TORABI: Yes, I agree with Suze on that. If you're in your 30s, 40s you're a baby boomer, still have maybe 20 years left to retirement, I'm not saying completely pull out of the stock market. You still have a pretty healthy timeline until you reach 60. And realize people are still going to work in their retirement years. So when we say retirement, sometimes you're talking about 65, 70, in some cases. So now's a good time to speak with your financial adviser, your portfolio manager, talk how to rebalance your portfolio, maybe move some of your investments over to fixed incomes assets like bonds, maybe some cash. You know, realize that you don't want to be in the financials.

You don't want to be in the housing stocks, the builders, maybe some insurance names. Those are some of the riskier stocks. And of course, as you approach retirements, only five years left until you retire, you cannot afford to take on additional risk. And I am sorry to say, some of your money might lose, you might lose some money in the next five years. And that's just something you have to sort of think how you can recoup that? Like I said earlier, maybe working an additional year through retirement. Heath care is a huge financial burden through the golden years, and I think that - go ahead.

WHITFIELD: So in your 30s and 40s, this is kind of optimal opportunities to really make sure you've set yourself up properly for retirement. So when you talk about ways to invest, you spelled out some of the stocks, say you're relying on your 401(k)s, as a lot of people are now, worried because they're seeing quite the drop-off in there 401(k)s, give me the psychology on maxing out your contributions. Because it sounds as though you're going to tell me something that's quite different from what I've been hearing for years which is usually max it out. Saying, don't max it out?

TORABI: Yes. I think the max out equation works well when you're in your 20s. Again, you have that huge timeline. But when you're on that critical area, age of 30 to 40, you're buying homes, you have more assets, maybe you just want to attribute as much to your 401(k) as your employer is matching and not so much maxing it out. The equation becomes I want to match, not max. And take some of that additional income that you're putting -- instead of putting it towards your 401(k), you're putting it towards more safe havens like cash, fixed income. There's nothing wrong, I won't say this forever, for right now, nothing wrong with putting money in safe havens and just plain old savings account, because at least it's FDIC insured and not vulnerable to the huge volatile swings in the stock market.

WHITFIELD: And if you're over 50, your advice, too, running out of time. Just those typical savings accounts as well, CDs et cetera because you don't necessarily want to take risks with stocks and forget the 401(k) at this point?

TORABI: I always say there's money in money. When you have it in your hand and can smell it, and you can feel it it's there you know that. You can use it and it will be there tomorrow.

WHITFIELD: All right. Farnoosh Torabi from thestreet.com. Thanks so much for your time. Appreciate it.

TORABI: Any time, sure.

WHITFIELD: Suze Orman is back in a big way over the next hour as well, worked with the FDIC on its Web site for the average investor. Strictly volunteer, by the way. Wasn't paid. She wasn't paid. You can logon to myfdic.gov to answer some questions, and the site let's you know how secure your money just might be. You might want to check that out and, of course, we're going to hear a lit more from Suze Orman as well in the next hour.

All right. Back to the destruction from Hurricane Ike. Along the Texas Gulf Coast, this has been the scene. Long waits for aid in some of the hardest hit areas. We'll see what the National Guard is doing now to help out.

And teachers can spot them a mile away. Oh yes? Overachieving moms and dads who overreach to help their kids with school. Are you a helicopter parent?

(COMMERCIAL BREAK)

WHITFIELD: Parents want to help their kids succeed in school. Bur these days teachers say some moms and dads are really crossing the line. Kind of over the top, besides the sports sidelines kind of mom and dads cheering on kids. It's something else. This time parents are kind of in the classroom or in the principal's office way too much. Medical correspondent Elizabeth Cohen joins us with more of that. Is it parallel like that?

ELIZABETH COHEN, CNN CORRESPONDENT: There are some parallels. What teachers tell us are there are way too many helicopter parents these days. They are called that because they kind of hover over their children. And that they're driving teachers crazy.

(BEGIN VIDEOTAPE)

COHEN (voice-over): Cindy North has dedicated her life to teaching young minds. But rather than finding grateful parents she says more and more of them are actually blaming teachers for their kids' poor grades. Some parents take it too extremes.

CINDY NORTH, TEACHER: The one that stands out is a parent who went to a U.S. congressman and made a complaint about a homework assignment that I gave.

COHEN: These helicopter parents, as they're known, sometimes try to bully teachers into changing grades, and forgiving late homework.

NORTH: A lot of them feel that they have to be involved in every aspect of their child's life in order to make sure that their child turns out the way that they think he or she should.

COHEN: North was even forced to get a restraining order against one parent.

NORTH: The parent was a professional boxer and came to school looking for me.

COHEN: North is far from alone. Teachers across the country have similar complaints. So what's going on? Harrah Morano (ph), author of "A Nation of Wimps" says being too involved can turn a child into a wuss. And she says without coping skills, kids can become depressed and worse.

UNIDENTIFIED FEMALE: We're talking about panic attacks. We're talking about self-mutilation.

COHEN: Psychologists say if parents get too involved in every facet of life, kids won't learn to be independent.

NORTH: They're learning that I don't have to do my best, because somebody will always save me.

(END VIDEOTAPE)

WHITFIELD: Oh, my gosh. Am I seeing myself in the future? My kid's only three and pre-K. Is that going to be me?

COHEN (on camera): No. You'll be fine.

WHITFIELD: OK. Thank you. So teachers do feel like maybe this is an anomaly? It is not all parents they have to deal with?

COHEN: I want to be clear. The teachers we talked to said most parents are just fine, and don't do this. The few who to do it, the teachers I talked to said some teachers are thinking of leaving the profession, because the parents are driving them nuts. WHITFIELD: Oh my gosh, but then in large part do these parents have kind of good, legitimate concerns and maybe they're just a little overly sensitive about it?

COHEN: Right. Sometimes concerns are legitimate. Teachers told us, look, come to me. Go to the teacher first with your concerns. What makes for a helicopter parent often is one who goes to the teacher's boss or as we saw in the story to a congressman. Go to the teacher first with your concerns.

WHITFIELD: Right. Talk to me.

COHEN: Right. Exactly.

WHITFIELD: All right Elizabeth, thanks so much. You're not like this either? Right?

COHEN: I hope not. I really hope not.

WHITFIELD: Just checking. All right. Thanks a lot.

For more on helicopter parents and a lot of us hearing this for the first time. Me included. Helicopter parents. Logon to cnn.com/health, you can find details on the signs and symptoms plus some good advice from experts in child psychology. A big issue.

We'll meet a very grateful mom.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: She didn't show any signs of panic or being scared or anything.

(END VIDEO CLIP)

WHITFIELD: Oh, how composed! Nine years old. This daughter jumping to the rescue and making a very special delivery.

(COMMERCIAL BREAK)

WHITFIELD: As his commuter train barrels through a red light, head on towards a freight train, investigators say that the engineer never once hit the brakes. He and 24 other people were killed in Friday's crash in Southern California. The investigators are also looking at the engineer's cell phone records. Some teenagers said they were exchanging text messages with him around the time of the collision. Investigators are also interested in the engineer's schedule. He was working an 11 1/2-hour split shift that day.

Lining up for aid along the Texas Gulf Coast. For thousands of Hurricane Ike victims the wait a long one and the National Guard is doing all it can to speed up the process. Here now is CNN Pentagon correspondent Barbara Starr.

(BEGIN VIDEOTAPE) BARBARA STARR, CNN CORRESPONDENT (voice-over): The line forms early, days after Hurricane Ike struck the Gulf Coast, Texans are trying to survive, waiting for what food and water they can get. These National Guard troops say that people are hungry.

UNIDENTIFIED MALE: We have a bunch of water over there, we have none here, right?

STARR: Captain Anthony Zissimos says that one of his buddies was overcome.

CAPT. ANTHONY ZISSIMOS, TEXAS AIR NATIONAL GUARD: We had a woman with a baby and he kept thank him profusely and he got a little teary- eyed.

STARR: These men, all neighbors, have ridden miles to wait in line. Eric Jones has four children, one a newborn.

ERIC JONES, HURRICANE IKE VICTIM: Well, they say that the water may be contaminated so we have to come try to get ice or water or whatever kind of water we can.

STARR: But once they are at the head of the line, the next challenge, balancing the precious cargo for the ride home.

ZISSIMOS: I had about 1,300 cars come through here and we are averaging 20 cars every five minutes we're loading supplies in, and we ran out of food probably in four and a half hours.

STARR: People here didn't even look up as President Bush flew over in Air Force One. Life on the ground now is all about getting help.

UNIDENTIFIED MALE: There you go.

UNIDENTIFIED FEMALE: Can I get a couple more?

STARR: Ironically in Galveston where fewer residents are left, there is plenty available for the National Guard to hand out, but here, there is something else, newspapers are being handed out, the first information that people have had since before Ike.

UNIDENTIFIED MALE: This one says that Ike is heading our way.

STARR: The people in Texas getting what supplies they can and moving ahead trying to recover. Barbara Starr, CNN, Galveston.

(END VIDEOTAPE)

WHITFIELD: A long bumpy road to recovery. Well, here is something uplifting. She is not just a big sister. This nine-year- old played a special role in arrival of her new baby brother. We tell you how she helped deliver him.

(COMMERCIAL BREAK) WHITFIELD: All right. It is a birth that a California family will be talking about for years. A nine-year-old girl helped deliver her new baby brother after her mom went into labor earlier.

Demonte Lewis (ph) with CNN affiliate KPRA has the story from Sacramento County.

(BEGIN VIDEOTAPE)

DEMONTE LEWIS, KPRA: What do you want to be when you grow up?

JADEN LUJAN, HELPED DELIVER BROTHER: An art teacher.

LEWIS: Nine-year-old Jaden Lujan may want to be an art teacher when she grows up, but early Tuesday morning she was the closest thing to a doctor her mother had.

VALERIE LUJAN, PROUD MOM: She was very brave and she didn't show any signs of panic or being scared or anything.

LEWIS: Valerie says that after being pregnant for seven months she started to have contractions and they just kept coming.

V. LUJAN: All of the sudden, it started happening, like I felt all of the pressure.

J. LADEN: She was down on the floor and like she was like having panting breaths, yes.

LEWIS: With the 911 operator already dialed Jaden says she took over and did everything that the operator said.

Did you tie the umbilical cord?

J. LUJAN: I tied it off ...

V. LUJAN: Yes, the umbilical cord.

J. LUJAN: And like she told me to put him on his tummy and to rub beneath the belly button firmly.

LEWIS: And thanks to Jaden's help, all three pounds and eight ounces of Baby Chyron (ph) was born safely.

J. LUJAN: You know, I think my face was the first thing she saw because his eyes opened when he came out. So he was like staring up at me. And he started peeing.

LEWIS: Moments after the delivery, paramedics arrived on scene and took everyone to Mercy San Juan. Family members are all well and considering Jaden a hero.