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Bailout Negotiations Continue
Aired September 30, 2008 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN ANCHOR: Check this out. A crab hitching a ride on a giant jelly fish. Our reporter Pat Clyne shot this off Sanibel Island in Florida. With so many folks seeking alternative forms of transportation these days, this crab doesn't have to worry about those MPGs, it's relying on MPJs, do you know what that is?
T.J. HOLMES, CNN ANCHOR: That is hilarious. Who is writing this?
NGUYEN: Let me tell you, they're good. Miles per jellyfish, folks.
Clyne says there were at least three species of fish living inside of the creature's tentacles. The next hour of CNN Newsroom. How do you top that? Starts right now.
HOLMES: Sunday, it looked like a done deal and Monday, it was a dead deal. So today, what is the deal? President Bush urges lawmakers to get something done on the bailout package for your sake. If you are still wondering what this is all about, we are going to break it down for you.
Also, you are hearing all the dire warnings of gloom and doom. You might believe it or you might not, but we have some things that you need to be doing now for your financial health.
Plus, how would you like to be the next president? You know, the one who inherits all of this? Really makes you envy those candidates, doesn't it?
NGUYEN: Not really. But hello, everybody. I'm Betty Nguyen live at the CNN headquarters in Atlanta.
HOLMES: And hello to you all. I'm T.J. Holmes, and you are in the CNN NEWSROOM.
NGUYEN: Back to those problems. That financial bailout package is down, but it is not quite out. Lawmakers are scrambling for a plan B that has a better chance of surviving the House. The candidates are pushing for a solution and offering some ideas of their own. While the bill is in limbo, the credit markets today are tightening up, and loans become more elusive and more expensive and the financial crisis comes even closer to you. One bit of good news, though, on Wall Street, stocks have rebounded sharply after yesterday's record tumble, up 346 points right now. Susan Lisovicz is keeping an eye on the markets for us, Ed Henry is following what the candidates are saying and the financial situation pretty dominates every speech they are giving right now.
And our personal finance editor Gerri Willis will explain how the trouble with the credit market is as one expert said just one step removed from Main Street. So, Susan, let's start with you there at the New York Stock Exchange, looking at those numbers, while it is not 777 points, it is still kind of there.
SUSAN LISOVICZ, CNN CORRESPONDENT: That is right, Betty. I mean, it's not the end of the world as we know it, which believe it or not I heard on the floor yesterday with particularly tense moments. We were in shock. There were a lot of folks that were just in shock. Something that had been promised for days went down in flames and it played out dramatically with a historic sell off, but the good news is that the investors are back into the game today. It is important -- millions of us count on the stock market for our retirement, for our kids' education, for our homes, and folks are buying again, particularly financial stocks which is the epicenter of the selling yesterday.
We did got an upbeat read on consumer confidence and it did come out before we saw this crisis really start to really heat up in the last couple of weeks, but that was better than expected, and we did get new home prices, housing sale prices, house prices, rather, that continue a 10-month decline there. But we are seeing in advance, a nice advance and we're halfway there as you mentioned. We have miles to go before we sleep, but I think that one would say, because we are still waiting on Washington.
NGUYEN: Yeah, we are.
LISOVICZ: Back to you, Betty.
NGUYEN: You said that investors are back into the game, but you have to admit there are a lot of jitters out there?
LISOVICZ: No question about it. You know, I think that most economists say that this rescue bill may be important if they are so inclined to believe is not going to solve the greater ills of the economy, but it has got a basic purpose which is to free up a choked up credit market. Remember, we get a very important report at the end of the week and we're not only waiting on Washington, we're waiting on the jobs report for September, and we have had a grim theme there, 105,000 jobs expected to be lost for the month when the Labor Department releases that report before the opening bell Friday, and if that is accurate, it would be the biggest job drop many more than five years. So, we certainly have other pressing issues that investors are watching as well.
NGUYEN: Just one on top of another it seems. All right, Susan Lisovicz joining us live today with a little bit good news. We will take what we can get. Three hundred twenty nine points today and we will see how it ends today, Susan. OK. So that is what is happening with the market, but financial experts say what is happening now is not just a Wall Street problem anymore. Coming up a little bit later this hour, we are going to talk to Gerri Willis about how you are going to feel the chill from the freezing credit market. HOLMES: Well, as you have noticed, it is more than ever on the campaign trail all about the economy. It is the big issue again today for Barack Obama and John McCain. CNN's Ed Henry joins us now from Washington.
And Ed, I guess it is a good thing we had the debate last week and questions about foreign policy because all we would have been hearing from these two is about the economy and rightly so.
ED HENRY, CNN CORRESPONDENT: That's right, T.J. And today I can tell you for John McCain, it is all about the advisers saying, look, he is tired of being a punching bag over the last 24 hours and McCain has been pummeled and blamed in part for the failure of the bailout bill on Congress because he got involved heavily late last week, so today was about McCain fighting back and shift the blame back to Congress and basically insist, you know, this is their fault essentially, but what is interesting is that he is not attacking anyone specifically, he is just attacking Congress as a whole, an easy target, and today in Iowa, he never named Barack Obama. Didn't go after him, he was trying to sound a little more bipartisan.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: State the obvious, we are in the greatest financial crisis of our lifetimes. Congressional inaction has put every American and the entire economy as the gravest risk. Yesterday, the country and the world looked to Washington for leadership, and Congress once again came up empty handed.
(END VIDEO CLIP)
HENRY: Interesting as well that Barack Obama campaigning today in Nevada was sounding a pretty similar theme to John McCain. They sort of duked it out yesterday, but given the fact that there has been sort of a bit of a backlash overnight about both sides sparring so much, and not just the candidates, but both parties and that being the reason that this bill went down in part yesterday on Capitol Hill, and so Barack Obama was also talking about solutions and saying, let's just not point the finger, let's figure the way forward. Take a listen to what he said.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: While there is plenty of blame to go around, many in Washington and Wall Street deserve it. All of us now have a responsibility to solve this crisis. Because it affects the financial well-being of every single American. There will be time to punish those who set this fire. But now is the moment for us to come together and put the fire out.
(END VIDEO CLIP)
HENRY: I know this will surprise you, T.J., but there is actually a point of agreement today between these two candidates, both Barack Obama and John McCain saying that they want to lift the insurance cap from $100,000 to $250,000 on the FDIC insurance, so if you have money in bank, the deposits covered not up to just $100,000, but $250,000, they both think that might jump start the talks on Capitol Hill by showing it will help Main Street a little bit more than Wall Street. So yesterday, all about the fighting, but today, both sides trying to turn the page and pivot toward, OK, that happened and now how do we figure this out moving forward, T.J.
HOLMES: You are absolutely right, Ed, it does surprise me that there is agreement going on out there. Ed, we appreciate you today from Washington.
Of course, McCain, Obama, one of the two of these gentlemen will inherit a big financial mess when he is sworn in as the nation's next president. Our Christine Romans now looks at how it could take years before things get straightened out.
(BEGIN VIDEOTAPE)
MCCAIN: Change is coming to a neighborhood near you.
OBAMA: It is time for change in America.
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Both candidates are distancing themselves from the last eight years, but this economy will not suddenly change in 2009.
LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE: What is going on now is going to define the economic policies for the first term of the next president.
ROMANS: The collapse of Bear Stearns, the government takeover of Fannie Mae and Freddie Mac and AIG and bank failures and potential $700 billion bailout package.
ACHUTHAN: Either way, all of the government support given to markets and given to the economy, this year and in the coming months is blowing a hole in the budget.
ROMANS: And that equally handcuffs Obama and McCain.
OBAMA: We are going to invest $150 billion.
MCCAIN: We will invest as much as $2 billion a year ...
OBAMA: I will cut taxes.
MCCAIN: Tax cuts for America's hard-working families.
ROMANS: But can any of it really happen? The budget deficit is forecasted to hit $482 billion next year, the national debt is approaching $10 trillion before the current banking crisis and it is still unfolding and Medicare and Social Security are on the verge of running dry, and the wars in Iraq and Afghanistan are incredibly expensive.
MARK HALPERIN, POLITICAL ANALYST: They can both go out on the campaign trail and talk about change all they want, but whoever is sworn in, whichever one wins, it is going to be not a new agenda, but an old problem, a huge financial problem that George Bush is handing off to them.
ROMANS: The Obama camp says that a vote for McCain is a vote for a third Bush, but the fact is that either men will have to spend the first term trying to fix the same problems plaguing George Bush's last term.
(on camera): Bottom line, either candidate starts 2009 playing defense. This banking crisis is still unfolding, and there is no playbook for it. Christine Romans, CNN, New York.
(END VIDEOTAPE)
HOLMES: Well, John McCain and Barack Obama, which one could benefit from the financial turmoil that's going on? And by benefit we mean politically benefit. It is an issue we're going to be talking about straight ahead here on the NEWSROOM. Betty?
NGUYEN: Social Security and Medicare, are they threatened by the meltdown on Wall Street? Well, it's too early to know yet, but financial guru Suze Orman has some advice.
(BEGIN VIDEO CLIP)
SUZE ORMAN, HOST, "THE SUZE ORMAN SHOW": The fact of the matter is you always should have been concerned about. It had nothing to do with this bill. Obviously, we are underfunded for Social Security and Medicare has always kind of been in trouble, and these are things that you have to be careful about if you think that anybody else is going to take care of you, this is not an example that you have to learn to take care of yourself in every way because obviously our representatives don't have the intelligence to know how to help any of us including themselves in my opinion.
(END VIDEO CLIP)
NGUYEN: Well. We will have more of Suze Orman's take on the House rejection of the huge bailout a little bit later in the hour.
Also. The winners and losers and who exerted political clout and who didn't in yesterday's vote of the bailout bill. We will ask the experts.
And some victims of Hurricane Ike already suffering the loss of the homes could suffer from another important loss, not having a say in the upcoming presidential election.
(COMMERCIAL BREAK)
NGUYEN: A plea for help being made on behalf of prospective Texas voters. Citizens' groups are asking the governor to extend the upcoming registration deadline because of Hurricane Ike. The deadline is October 6th, but many possible voters are in temporary shelters and libraries where they would pick up the proper forms, those are still closed.
(BEGIN VIDEO CLIP)
MAUREEN HAVER, "HOUSTON VOTES": We have been fundamentally been derailed because of Hurricane Ike and if people throughout the rest of the State of Texas were able to register in that time, we deserve that same right to register to vote.
(END VIDEO CLIP)
NGUYEN: Here is what the groups want, they want a seven-day extension in the 29 counties declared major disaster areas after Ike. Now there's been no official response, though, from Texas Governor Rick Perry.
And Ike's effect is felt by 150,000 residents in Houston area who still have no power which is down from the two million who lost power when the hurricane tore through 18 days ago. Centerpoint Energy said that it will be a few more days before they make all of the necessary repairs.
Chad Myers have been watching the weather outside and it is amazing the damage that Ike has done, Ike is not alone, there are more on the horizon it seems.
CHAD MYERS, CNN METEOROLOGIST: There are other storms on the horizon. The 12th-named storm Laura, although the good news it is in the Mid-Atlantic, and the only bad news is if you are on a cruise ship going from New England to England, I don't know and other than that, shipping interest, that is it. It is a 60-miles-per-hour storm that is forecasted and it does get one more storm names out of the way. Here is what we will see more storms in October but by November, the area is much, much smaller, but the East Coast of the U.S. is still under the gun for storms in September and into October and then very, very light chance into November.
(WEATHER UPDATE)
NGUYEN: You need to pull out the coat and walk around the apartment with it on. Thank you, Chad.
You know, traffic near Tyler, Texas, is still being rerouted today. An explosion, check it out, which lit up the East Texas night sky and shutdown a stretch of Interstate 26. Six 18 wheelers and a car were involved in a nasty-crash. Two people in the car were killed and a third person was injured. Police say that one of the trucks rolled and caught fire, causing that pileup.
It is a daily routine in Atlanta and much of the rest of the Southeast for that matter, running low on gas, searching for gas, finding no gas. We will look at why the South was so hard hit and when the shortage will end.
Also in the current financial crisis, are your credit cards a ticking time bomb? We will ask CNN personal finance editor Gerri Willis. (COMMERCIAL BREAK)
HOLMES: All right. That failed bailout bill, is a big political football right now, both sides passing the blame and trying to score some political points here, so how exactly is that going to impact the race for the White House and will Barack Obama or John McCain benefit politically from what happened?
Joining me now from Chicago, CNN political analyst and Obama supporter Roland Martin, there he is, fresh off of the teeth cleaning, and you are look good there, brother.
ROLAND MARTIN, CNN POLITICAL ANALYST: Chillin'.
HOLMES: Also from San Diego, cnn.com commentator and nationally syndicated columnist Ruben Navarrette. Thank you both for being here.
I will start with this question, plenty of blame that is going around right now so let's start with who exactly, and I will ask you this first, Roland, who exactly is showing leadership at this juncture? Who can we point to, who can this country look at and say, OK, they are leading us in this time of crisis?
MARTIN: Well, compared to all of the guys, Bugs Bunny. Look -- nobody, nobody is. I mean, you have an impotent president who has no leadership whatever and you have Democrats in the Congress trying to work the Republicans in Congress and you have John McCain trying to play John Wayne who does nothing in the case as well, and so that the bottom line is that people are waiting. We are a reactionary society, T.J. So I think what members of Congress are saying, let's see if Wall Street falls and then we will do something.
Ruben, you see it as way as well or do you see anyone out there, or, the president is trying, but he is a lame duck president and he is not getting the coverage on this issue as much as McCain or Obama are right now, so do you see anyone seeing political leadership?
RUBEN NAVARRETTE, CNN.COM COMMENTATOR: I disagree with Roland a little bit. I think that John McCain and Barack Obama are both having a much better week this week than last week and saying the same thing and scolding members of their own party talking about a bipartisan solution.
OK, we get that. But back in Washington, your right, the president obviously doesn't have any juice even with members of his own party, Nancy Pelosi a disaster as House speaker. She couldn't even control members of her own party. She needed 12 votes and 95 Democrats voted against the bailout. She could not arm twist her way to 12 votes?
So I am with Roland in terms of the disaster in Washington, but I give both of the candidates credit, I think, today, for finally getting on the stump and saying we need a bipartisan solution.
MARTIN: T.J., Nancy Pelosi delivered more of her members than John Boehner did. The Democrats were around 60 or 65 percent supporting the measure and you had far more Republicans who were against it.
HOLMES: But Roland, did she also lose some with that speech she made?
MARTIN: Of course -- yes -- no.
HOLMES: No, she did not lose any?
MARTIN: Well, if anybody buys that nonsense that, oh, we were so hurt because of what Nancy Pelosi said, that is nonsense. But one of the problems is that you also had Democrats who felt there were no more production for the homeowners in this deal. You only had 18 or 20 members of the Congressional Black Caucus and a low number of the Hispanic Caucus who voted for this and that was the problem on the Democratic side.
HOLMES: Ruben, do you agree that Nancy Pelosi did not lose any votes and they each need to suck it up and not let their feelings get hurt?
NAVARRETTE : I think she lost votes with that speech, definitely, because we were talking about a bipartisan solution and she actually looked silly with the speech, because she said we were going to fix this problem and then we're going to move forward and elect a new president and new Congress.
She got a little ahead of her self, it turns out she didn't fix the problem after all. So it was inappropriate and that's a fact but beyond that I think it is an indictment on both houses. Roland talks in terms of percentages and more of this and less than that but 40 percent of the Democrats didn't support the plans and the difference was 95 Democrats versus 133 Republicans and most of American only sees a small window between those numbers and that is the real story.
MARTIN: (Inaudible) by 23.
HOLMES: Almost out of time and just real quickly, there is a lot of cases being made out there that someone needs to sell this package a little better to the American people. They are against it right now because they believe it is all about Wall Street and some even saying we should stop using the word bailout, that would even help. Quickly, both of you if you can for a couple of seconds, do you agree that someone needs to sell this package a little better?
MARTIN: I absolutely agree with that and also more protection for homeowners. They have got to be able to get out of these ridiculous mortgages as well. The Republicans should get out of the way on that and allow for homeowners to be protected.
HOLMES: All right. Ruben?
NAVARRETTE: Well, urgency is the main deal. We need a quick solution, not a perfect one, we need to do something right now.
HOLMES: Right now. Ruben Navarrette, with us as well, Roland Martin with us in Chicago. Gentlemen, we appreciate you coming on and we will see something happens right now. Thank you both for coming on.
MARTIN: Thanks a bunch.
HOLMES: There also seems to be a wealth of doom and gloom out there that you have noticed. Some of it might be over the top you might be thinking but whether you believe the dire warnings or not, there are things you should be doing to protect yourself right now and we will tell you what they are.
(COMMERCIAL BREAK)
HOLMES: All right. So the big question to start out your day, what is next with this financial bailout bill? Congress has a life preserver but refused to throw it into the water and this morning we are trying to figure out the next step in covering the story. Take a look.
(BEGIN VIDEO CLIP)
TENISHA, EXECUTIVE PRODUCER: What is next? That is the big question, how do we move forward?
UNIDENTIFIED FEMALE: What are the sticking points and the revisions and what are we thinking that will change?
MERYL, WRITER: Can we talk to an economist to find out what else Bernanke and Paulson can come up with to free up more money in the economy.
UNIDENTIFIED FEMALE: Well, we have to look at either Paul La Monica or somebody or even our congressional people.
(END VIDEO CLIP)
NGUYEN: Well, in fact, we are hoping to talk to Paul La Monica of cnnmoney.com and we will have him shortly to shed light on all this to help us to figure out what we should be doing as individuals with 401(k)s, with savings, with loans and what should we be doing as we wait to see what Congress does, but in the meantime, as we wait on him, I want the tell you about the bailout bill, the main goal was to restore confidence, keep credit flow, but now people looking to buy a house or a car or even looking to get some financing, businesses may not be able to get loans. People may lose their jobs. With all of these scenarios playing out today, experts say it is coming.
What is coming? What should we be prepared for? Well, CNN's Susan Roesgen is in Oak Park, Illinois, this morning talking with business owners. She joins us now.
What are they saying? I mean, there's a lot of fear out there, Susan.
SUSAN ROESGEN, CNN CORRESPONDENT: Oh, you bet there's a lot of fear. Because this financial crisis from Wall Street has already come to Main Street. And a lot of small towns with a lot of small businesses all across the country. The big fear is the credit crunch. Will people be able to get a loan or an extension on the loans? Will they be able to keep their businesses going? Now, this is a popcorn shop. We've been here all day. This is in Oak Park, Illinois, it's basically on the main street of town here. And this is a small business that is you know, trying to keep going. We've got Erik Claesson up here. You've got the flavored -- yes, making caramel popcorn, the kind that everybody likes.
How did you know and when did you know that you would be in trouble because of what was happening on Wall Street?
ERIK CLAESSON, SHOP OWNER: Well and even before that even recent stock drops and everything, it's been a slow year and the holidays weren't that strong last year even for us. So, it's kind of put us in a cash-strapped situation here going into busiest season of the year which is our fall.
ROESGEN: Because, like so many others, you had a credit line, a $30,000 loan basically. You did use it up in your slow months and now you are facing your most busy time. But you couldn't probably get an extension on the loan if you needed it, right?
CLAESSON: That's right. Our loan was with Washington Mutual and I don't think that they're loaning out a lot of money these days. And it's -- the well was dry. So, you know, when it gets tough and you're the business owner, you're the one who doesn't get the check.
But we've cut back on employee hours and we are trying to run a little bit leaner and trying to keep ends meet and keep things going along until we get to the best time of the year here, just right around the corner.
ROESGEN: Now we've been talking to you quite a bit this morning and you have had a lot of responses, right, from people who've called you, who've seen this on CNN. Tell us about some of the things that people are saying about your business and what they want to do, or if they're in the same boat?
CLAESSON: Well, you know, it's funny. People have been calling all day and we've had calls from people who sent -- they ordered Halloween tins for their grandchildren. And we had a lady who owns a wine store in Baltimore, and she ordered some popcorn and she said, oh, you know, I'm just like you. I didn't get a paycheck last month either. And so she said, you know, I know exactly what you're going through and it's tough times for all of us.
And it's kind of -- and she said, you know, all of us, small business owners need to stick together and hopefully the whole country will help the small business owners get through this thing.
ROESGEN: Yes. You said you didn't get a paycheck, she didn't get a paycheck last month. Explain that to us. What happens when you don't have a credit extension, an extension on that loan? Oh, you got to probably check the candy, right? CLAESSON: No, it's just my warning buzzers. It's my warning buzzers, I have a couple more minutes. But, you know, when the cash isn't available, you have to find ways to make the ends meet and get through. So, you know, we're doing without things at our house. And we're doing -- i's hard. We have four kids at home and I have a mortgage, too. And while I didn't have a jeopardy or a high-risk mortgage, it certainly puts a stress on me, just like so many other people.
ROESGEN: You haven't had a paycheck in three months, right? You haven't been able to pay yourself because you had to keep paying the employees.
CLAESSON: Yes. You have to pay the employees and the rent and the vendors and you got to keep the ship afloat, so.
CLAESSON: OK, Eric. Well, we wish you a lot of luck. We know that you're already shipping. You can hear some of the shipping in the background, Betty. Obviously with the higher price of diesel fuel, shipping costs are something else that has really gone up. As much as 40 percent in the increase in the diesel prices. So, a lot of small businesses are hurting.
And one other person, I've got to tell you about who called Erik, after seeing one of our reports, was a woman, Betty, who said that she was actually going to call Warren Buffett. She was going to talk to Mr. Buffett herself and tell him that maybe he should help. She says that she got through to Warren Buffett's secretary and then she got through to him, she told Erik, and they talked for four minutes.
So you know, what a lots of small business owners want is somebody to listen to them. Whether it's Warren Buffett, or their local Congressman, they want to get this economic rescue package finally passed, in a meaningful way to help them keep going.
NGUYEN: Absolutely. They need not only someone to listen, but they need some good advice to get through these times.
Susan, we do appreciate it.
And you know, to keep up with everything that's going on in this financial crisis, here's what you can do: You can log on to CNNMoney.com
(BEGIN VIDEO CLIP)
TONY FRATTO, DEPUTY WHITE HOUSE PRESS SECRETARY: This isn't a debate. This is about free markets, or socialism. This is a debate about frozen markets. And you can't have a free market when you have a frozen market. And what we're trying to do is unfreeze this really important part of our market that has an impact on every financial transaction in this country, in one way or another.
(END VIDEO CLIP)
HOLMES: Well, there you have it, once again. No matter how many ways you hear it put, it's still kind of hard to wrap your head around exactly what's going on. But we want to break it down more, talk about the impact this huge event is having on you.
For that, we want to turn to CNN's personal editor Gerri Willis, who is in New York. Gerri, always good to see you. We've been seeing you a lot, it's always a pleasure. Wish it was under better circumstances.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Right.
HOLMES: Help us here. Kind of break this down for us, but still, a point to start with -- the bailout. A lot of people are saying, you know, it's not being sold well enough to the American people.
WILLIS: Right.
HOLMES: And even the word bailout shouldn't be used.
WILLIS: Right. Exactly. That is a huge debate. Like, how do you sell it? What are the words that you use? But you know, it's not been successful, not so far. Currently all bets are off. And with this bill it was hoped that it would be easier now, for consumers to get money, to borrow money.
For small businesses that you were just talking about, to get money. The opposite has happened. Consumers report it's even harder to get loans. We've been saying the passage of the bill would likely have injected capital into the stock market. That would have been good for all of those 401(k) holders. But today the stock market is up triple digits. Some analysts think that means there's some form of a bailout coming soon. Fact is, we just don't know.
HOLMES: We just don't know. People are nervous. You talk about the market there. All of those 401(k)s are tied up in the market. A lot of people sometimes don't think, yes, you have a lot of money in the market.
People are nervous and they're looking for any advice. What's the safe advice? What do you tell people right now? Is it just to hang tight?
WILLIS: Well, you see that biggest one-day drop ever. You see the $1.2 trillion in market value that's wiped out.
But you know, you've got to make some comparisons. Put it in context. In October of '87, the stock market, not seven percent, not fourteen percent, but 22 percent, OK?. I mean, we've been through this kind of before. The markets have weathered the storm.
Look, if you have a retirement account where you have maybe a decade or two before you retire, you don't need to pull the plug. But the reality here is that you can't sit completely still. Here's some things you're going to want to do. A) number one: You want to know what the return is on paying down the credit cards. You Probably have a 14, 15, 16 percent interest rate on the credit cards. Paying that down. You can consider the return 14, 15, 16 percent.
Pay down that debt. Have cash on the sidelines. You need some emergency money. And then you need to understand what it is that you own in the 401(k). Look at those funds under a microscope. There is an X-ray tool on morningstar.com that can help you out. It's a great little tool. Help you understand what you own, what you got in. So, when the time comes, you can make the changes if you need to. But you sure don't want to sell into a down draft.
HOLMES: Yes. Sounds like people just need to educate themselves and be aware of exactly where their money is.
Gerri Willis, thank you so much. Always good to see you.
WILLIS: My pleasure, T.J.
HOLMES: Well, we've been talking about the giant bailout bill. It has been rejected of course, now. But, what if it wasn't. What if this compromise measure comes up again? And it is actually passed? So, does that mean, poof, everything, all of our problems just simply disappear?
Once again, listen to personal finance expert, Suze Orman.
(BEGIN VIDEO CLIP)
SUZE ORMAN, PERSONAL FINANCE EXPERT: These are deep problems. And when and if they sign this bill that doesn't mean -- if they sign this bill, doesn't mean that everything goes away. You still have all these things to work through. And it's going to take a long, long time.
I personally think you're going to see unemployment increase. You're going to see the markets continue to go down if they don't do something here quickly, possibly to 8,000 or 8,500. So, these things take time to recover. You know, it was 2000, when the market started to freak out a while ago. It took us a long time to get back up there.
HOLMES: OK. No matter how much you value her opinion, it's still just one opinion. Before you do anything, you need to read all you can, get as many of opinions as you can. And if you have a financial adviser, certainly want to talk to that person.
Well, Sarah Palin, that cheesecake woman. No, she's not a cheesecake woman. It was a cheesecake moment. Let me get that clear. All she wanted to do was get a sandwich. You know? And it turned into this whole mess. The Republican vice presidential candidate seemed to be at odds with her running mate, John McCain at a stop in Philadelphia. We'll talk with the student who was involved in that incident.
Also, Greenland, the last frontier kind of place, you think? Will it melt away? Scientists dig deep to find out.
(COMMERCIAL BREAK) NGUYEN: There were tears on the witness stand. Hear the emotional testimony in the murder trial of the man accused of shutting down Atlanta in a deadly courthouse shooting rampage.
(COMMERCIAL BREAK)
NGUYEN: It is enough to make a campaign manager cringe. Sarah Palin making headlines for slip up on the campaign trail. Well, over the weekend, Palin stopped at Tony Luke's cheesesteak restaurant in South Philly and there she was asked about Friday night's presidential debate. And then after putting in her own order, she was asked about -- by a Temple University grad student about the war on terror. Her answer seemed to agree with Barack Obama, who supports unilateral strikes in Pakistan. I want you to take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Governor, did you watch the debate last night?
GOV. SARAH PALIN (R), PRESIDENTIAL CANDIDATE: I did. I did. It was awesome. He was -- (INAUDIBLE). It was absolutely (INAUDIBLE).
UNIDENTIFIED MALE: Are you ready for Joe Biden next week?
PALIN: I am. I am looking forward to it.
(CROSSTALK)
PALIN: Look forward to (INAUDIBLE) Americans to (INAUDIBLE). Absolutely.
(INAUDIBLE). How about two of them.
UNIDENTIFIED FEMALE: Anything else?
PALIN: No.
UNIDENTIFIED FEMALE: And your name?
PALIN: Sarah.
(LAUGHTER)
UNIDENTIFIED MALE: That was great.
UNIDENTIFIED MALE: Oh, that is priceless.
UNIDENTIFIED MALE: What about the Pakistan situation? What are you going to (INAUDIBLE)?
PALIN: (INAUDIBLE)
(CROSSTALK)
UNIDENTIFIED MALE: (INAUDIBLE) is blowing up, you know? PALIN: Yes, it is. And the economy there is blowing up.
(CROSSTALK)
PALIN: If that's what we have to do to stop the terrorists from coming in (INAUDIBLE).
(END VIDEO CLIP)
NGUYEN: All right. In defending his running mate, McCain insists that Palin shares his views on the issue. Well, Michael Rovito is the Temple grad student that you saw there who questioned Sarah Palin about Pakistan and the war on terror. And he is a supporter of Barack Obama. We do want to throw that out there. Rovito joins me now from Philadelphia.
All right, first of all, there is a lot of talk about how this went down. Let me ask you first of all, did you know Sarah Palin was going to be there? Or was this complete coincidence?
MICHAEL ROVITO, TEMPLE GRADUATE STUDENT: Just a complete coincidence. I was down at the Temple homecoming football game with my family and we chose to go to Tony Luke's for something to eat and by chance she just showed up.
NGUYEN: All right. So when you saw her there, what made you want to walk over to her and then start asking about Pakistan?
ROVITO: Well, for me, the war on terror and the whole Waziristan situation is very important in terms of me, my thoughts. And I just felt that she needs to be accountable. And that's all it was. I had no intention of stumping her or anything. If Biden, Obama, anyone was there, McCain, I would have asked the same exact question. Her luck was that she was there.
And -- I just had to ask the question. It was an opportunity. There was extreme accessibility. There was no reason for me not to ask the question.
NGUYEN: As you probably know in an interview with CBS, McCain called this gotcha journalism. And I want you to --
ROVITO: Yes, I like that one.
NGUYEN: -- a look at how this all played out. But it first starts with you asking that question. So take a look.
ROVITO: OK.
(BEGIN VIDEO CLIP)
ROVITO: So what should we do? Cross the border from like Afghanistan to Pakistan, you think?
PALIN: If that's what we have to do to stop the terrorists from coming any further in, absolutely we should. KATIE COURIC, CBS NEWS: Are you sorry you said it, Governor?
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Wait a minute. Before you say, is she sorry she said it -- this was a gotcha sound bite.
COURIC: But it wasn't a gotcha, she was talking to a voter.
MCCAIN: She was in a conversation with a group of people and talking back and forth. And -- I will let Governor Palin speak for herself.
PALIN: In fact, you're absolutely right on. In the context, this was a voter, a constituent, hollering out a question from across an area asking, what are you going to do about Pakistan? You better have an answer to Pakistan. And I said, we're going to do what we have to do to protect the United States of America.
(END VIDEO CLIP)
NGUYEN: All right. So, Mike, let me ask you, was this gotcha journalism? Because after all, you did work for the Democratic lieutenant governor, you also served as Pennsylvania's Democratic college president. Was this gotcha journalism?
ROVITO: I don't even know what that means, but of course not. I am not a journalist, I'm just a tax-paying citizen. And if we cannot ask a question of our veep and presidential candidates, and if we do, we get scorned for being a gotcha journalist -- again, I don't know what that means but -- then it is a sense of -- I don't know, it's almost like tyrannical in a way. Like -- I think that comment, just speaking objectively, was kind of a blow to the integrity of journalists and tax-paying citizens who have questions that we want our vice presidential and presidential candidates to answer. I don't get this.
NGUYEN: Well, what he's trying to say is -- did you try to set her up and play stump the candidate?
ROVITO: No, of course not.
NGUYEN: Were you surprised at all by the answer? Because in listening to it, it kind of sounds like she was in line with some of what Obama has been saying.
ROVITO: Well, I mean I was surprised at what she said just based on the sheer fact that she would agree with Obama instead of McCain. That surprised me.
Again, I asked a question. I would have asked anyone else that same question. And just her response -- it's just indicative of, I think, like the lack of any kind of policy that she has.
NGUYEN: All right. Mike Rovito, a Temple graduate student who joins us today to talk about his side of the interviewing here. And as he says, he's not a gotcha journalist. So -- thanks for joining us today. We do appreciate it.
ROVITO: No problem. Thank you.
NGUYEN: Well, new details in the case of the Atlanta courtroom shooter. We're going to take you inside the trial for the compelling testimony in the case against Brian Nichols.
Saving Greenland from meltdown. It's all about the ice, very deep ice that is. Get your long johns, because we are taking you there.
(COMMERCIAL BREAK)
NGUYEN: Paul La Monica of CNNMoney.com joins us now.
All right, Paul, in light of all that is going on with this financial crisis, a lot of people at home are wondering, what should I do right now? So break it down. What should the average American do looking at this situation?
PAUL LA MONICA, EDITOR-AT-LARGE, CNNMONEY.COM: Yes, Betty, I think really the key thing is that people obviously should first and foremost stick to their financial plan and not panic. And I think what this really proves is that anyone out there that's -- paying their bills on time and working hard should really just try and continue doing what they have been doing.
NGUYEN: And one of your tips is to be useful at work. Try not to get laid off. That would be the worst possible thing to do right now in this economy.
LA MONICA: Obviously. We are looking at a job market that is already pretty weak. More than 600,000 jobs have been lost this year. And one of the big debates regarding the bailout and whether or not it should pass or not is that there is some fear that there could be even further job losses if the bailout doesn't go through. Whether or not --
NGUYEN: But how do you prevent that, Paul? If your company is not making enough money, or it's not getting enough money loaned to it by these banks to keep these payrolls out there, it may fold, therefore you are laid off. It's really not something that you can do.
LA MONICA: No, it is true, unfortunately that's what makes this kind of a scary time. There are certain things that are out of the control of the average American person right now. And obviously, that is -- this is not to suggest that if you just keep your head down, you'll definitely be OK, because unfortunately some solid businesses have gone under, and we may see more --
NGUYEN: SO do you not panic? What steps should we do to prevent us from panicking?
LA MONICA: In terms of investing, I would say if you have a 401(k) plan or a longer term retirement account, really this is not the time to raid it unless you absolutely must. If there are times of extreme financial duress, then of course you may have to consider tapping into something you are really building a nest egg for. But really, the bottom line is that you just have to try and keep your head down, not get swayed too much by the emotion --
NGUYEN: Try to ride it out.
LA MONICA: Yes, try and ride it out basically.
NGUYEN: All right, thank you. Paul La Monica joining us --
LA MONICA: Thank you, Betty.
NGUYEN: -- from CNNMoney.com -- T.J.
HOLMES: Well, Betty, Greenland may be one of the biggest misnomers out there on the planet. It's a land of ice, not green necessarily. But the name Iceland I guess was already taken. This is global warming that is threatening this icy wonderland. It is possibly one of our last frontiers here.
Here is what a "TIME" magazine reporter discovered on a recent trip.
(BEGIN VIDEOTAPE)
BRYAN WALSH, ENVIRONMENTALIST COLUMNIST, "TIME" MAGAZINE: I'm Bryan Walsh and I'm going the "Going Green" columnist for "TIME" magazine.
I went to Greenland -- and I had gone there to see the -- what's called the NGEI expedition, that's the North Greenland Eemian ice drilling. The whole idea of what they are doing in Eemian is to get a better idea as to what the climatic history of Greenland is in the past so you know maybe how it's going to react to warming in the future.
This fieldwork in Greenland is one of those last frontier kind of places. There are scientists here who are drilling in the middle of the Ice Cap in Greenland eventually about 25 kilometers down. And as you get down further and further, you actually go back in time and you can actually find how warm it was 50,000 years ago, 100,000 years ago.
And so, the hope is that if you can better understand what happened in the past, you can use that information to create better models for the future and then be able to say, with a lot more certainly, yes, this temperature in the future will lead this much melting and therefore that is what we have to avoid.
In (INAUDIBLE) we -- first we took a boat tour and then we took a helicopter from the town and went over the ice fjord. You have one of the most biggest, most productive glaciers. Puts out something like 20 billion tons of ice into the sea through an ice fjord every year. And so in the harbor around this town, Luzette (ph) you see massive icebergs just sort of floating out there. Sometimes they'll turn around, they'll break apart. And we did see bits just shattering off. In one particular iceberg that seems half the size of Yankee Stadium just gives way. One second it is there, and the next second, suddenly, a crack that you can hear miles and miles away.
Is this something that just happens all the time? Is it something that our actions on the environment are making more frequent?
What I came to understand is that we are changing the system faster than anything that has happened before. And that is alarming. I mean, to actually see that you can affect this massive piece of ice that has been there for over 130,000 years, even longer, that is scary. And your understanding of just that much responsibility the human race has for the future.
(END VIDEOTAPE)
NGUYEN: Well, it was an emotional testimony today in murder trial of the Atlanta courthouse shooter, Brian Nichols. One witness described seeing two of the shooting victims.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: (INAUDIBLE) ... blood on top of his head and I saw Julie. She was laying -- she was laying on the ground.
(END VIDEO CLIP)
NGUYEN: Another witness, a lawyer who was appearing being the late Judge Roy Barnes, says the judge never knew he was about to die. Nicole Waller testified Nichols walked up behind the judge, from his chambers, and fired. Nichols admits killing the four victims, but he is pleading not guilty by reason of insanity.
(COMMERCIAL BREAK)
HOLMES: And if we needed another crisis these days, we've got a have gas crisis to deal with in the south. Drivers may be dealing with it for quite some time as well, maybe two more weeks. The shortages have tied everything up and they are tied to post hurricane supply disruptions that have led to long lines and pretty short tempers, especially in some urban areas. Police around Atlanta have been called to deal with traffic jams and line cutters at gas stations. Two suspects were even arrested for siphoning gas from a day care center van of all vehicles to siphon from.
Now I want to head to the 3:00 p.m. NEWSROOM with Rick Sanchez. That's coming your way right now.
