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Uncle Sam Saves Citigroup; President-elect to Announce Economic Team; Deadly Bomb in Baghdad Kills 5
Aired November 24, 2008 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN ANCHOR: In the meantime, though, a big rescue for a fallen giant. Uncle Sam steps in with a package to save Citigroup. What's in the plan now? And what to be in it for you a little bit later.
Also, issue #1 on the minds of our leaders. This hour we hear from the president and later from the president-elect.
It is Monday, November 24th. Hello, everybody. I'm Betty Nguyen, in for Heidi Collins, and you are in the CNN NEWSROOM.
Well, you already know it but your money at the center of this morning's headlines. The feds are funneling $20 billion of new taxpayer cash into Citigroup. But that may only be the beginning for a banking giant considered too important to fail. The nation's financial crisis is issue number one for President-elect Obama. Two hours from now he's going to introduce the nation to his economic team.
And holiday shopping. Are you cutting back this year? Well this hour some hard numbers for what's expected to be a grim shopping season.
First up though let's check out the numbers on the big board. See how the Dow is today, already up 165 points. May have a lot to do with that Citigroup bailout. We're going to be talking a little bit more about that. In fact, CNN's money team is in place to break it all down for you. So let's begin with Christine Romans and that Citigroup bailout.
How is this thing supposed to work, Christine?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Hi there, Betty.
Well it's more of your money for troubled Citigroup. We've already given them $25 billion as part of that initial $700 billion bailout. Now this is another $20 billion. But you point out rightly it could be even much much more than that. Because the United States government is backstopping some $306 billion of bad loans. Why did we get here? Well bad loans is what this is all about.
So purchasing an additional $20 billion in stock, the U.S. taxpayer will get $27 billion in preferred shares paying 8 percent interest a piece. So a little bit of a yield, a little bit of interest for that investment. But indeed this was done because the United States government decided that this bank could not suffer any further. That the ramifications on a global economy in the U.S. financial system would be just too strong.
What do we get in return for that? Well, the company has to limit executive compensation. It has to reduce its stock dividend payouts and most importantly perhaps it has to adjust loans for homeowners in trouble. Much like the FDIC orchestrated the IndyMac thing. After that bank failed, those home loans were adjusted for homeowners in trouble. The government says with these transactions the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy. What we know is that the stock price at least of Citigroup show that this was a bank that was really under duress.
The stock by last Friday had tumbled, tumbled to $3.77 a share. Think of that. From $27 earlier in the year. Investors turning incredibly pessimistic on Citi. This is a bank with $2 trillion in assets. It's got 300,000 employees in about 100 countries. The United States government stepping in with a lifeline saying that they, taxpayers, you and I, Betty, are going to make sure this company doesn't fail.
NGUYEN: Well so far it seems like investors like looking at the numbers. It keep climbing up 176 points already this morning.
Christine Romans, joining us live.
Thank you, Christine.
As we all know these are tense times for Citigroup and of course, its shareholders. But the people who work there had to be really worried this morning. Tens of thousands already facing layoffs and more to follow. Our Allan Chernoff is in New York with that part of the story.
OK, so with this additional money being invested in there, we're still going to see more layoffs?
ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Indeed we are, unfortunately, Betty.
The chief executive officer of the company saying that Citigroup is committed to streamlining the company. That basically means he's going to follow through on the plans announced last week to lay off more than 50,000 employees.
Now, Citigroup taking tremendous pain there, but at the same time, this injection of capital adds a lot of stability to the company, and that, according to the chief financial officer who I spoke with earlier today, is very, very positive. He says this is a huge amount of capital and will allow the company to basically ride through what he calls a very challenging environment right now.
Now, one employee early this morning walking into the bank, he said, we're going to make lots of money. Now how is that? He said paraphrasing the chief executive, once the economy stabilizes. One the global economy stabilizes. Keep in mind, Citigroup is a very big company overseas. Lots of commitment to many companies around the globe. As far as customers, a lot of them feel the government simply had to do this.
(BEGIN VIDEO CLIP)
MARCELO CABRAL, CITIBANK CUSTOMER: Of course, you have to be worried. I wouldn't like to be a shareholder at this point. I would prefer to be a client, which is where I am. But I think the government is doing the right thing. Citi is too big to fail. It would be a disastrous for the financial markets and the economy in general.
JIM CONNOLLY, CITIBANK CUSTOMER: At this stage, you have to step back and say it's probably the right thing to do. Because the stock market is just up and down too much. You can't have the drops we've been having over the past couple of weeks. So we need to stabilize and stabilize Citigroup. You know, I say that but I hope it works. Nothing has shown me that it's going to work yet.
(END VIDEO CLIP)
CHERNOFF: That's really what it's all about. Stabilizing not only Citigroup but also the financial system and the global economy -- Betty.
NGUYEN: The big question we heard it right there, is it going to work? A lot of money being invested. We want to see some returns from that.
All right. Allan Chernoff --
CHERNOFF: Betty, I think that answer is maybe it has to work.
NGUYEN: Yes. We'll see. Thank you.
President-elect Barack Obama well he has made his pick and in a couple of hours you will meet his money team. As we've been talking all this morning about investments. CNN's Suzanne Malveaux joins us from Washington with a list of names that we could see announced today for that team.
Hi there, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Betty.
Obviously, Barack Obama is going to talk out the Citigroup bailout but he's also formally named his economic team at this news conference in about a couple of hours or so.
Top on the list, of course, includes the New York Fed chair Tim Geithner. He's going to be the Treasury secretary. What makes him an important choice is that as the New York Fed chair he's already been very much involved in the federal bailout plan. So he really is a link between what is happening now in the Bush administration and what's going to take place in the new Obama administration.
Another name, of course, we'll be rolling out former Treasury Secretary Larry Summers. He's going to be a top economic adviser. Now he is seen as someone who can help shake the economy policy in the early days while Geithner kind of gets his head around running the Treasury Department, dealing with the whole bailout issue.
We also just got word that Christina Romer, an economist, a professor at the University of California Berkley. She's going to be chairing the president's council of economic advisers. And what makes her unique is she's an academic. She's a Washington outsider. And she has expertise in the Great Depression, which in these times is seen as an asset in handling today's crisis.
So President-elect Barack Obama says that he hopes to sign a two- year economic stimulus package, a stimulus packaged, very soon after taking office. I'm sure that we're going to hear a lot more about that plan at the news conference -- Betty.
NGUYEN: And we've already heard about Bill Richardson, Hillary Clinton, any news on those fronts?
MALVEAUX: All abuzz, of course. We're expecting Obama and Richardson as Secretary of Commerce, Richardson is interesting, brings a lot of state-level experience to the table when it comes to economic policy. His current job, he's already dealt with some of these issues that Obama is talking about as the governor of New Mexico. He took state money, he invested it in a variety of companies, a solar company, an aviation company to try to boost local businesses and create jobs.
Now the big buzz for Hillary Clinton, two sources close to her have told me that they fully expect for her to accept the position of secretary of state. Other sources telling CNN that Obama is on track to nominate Clinton as the Secretary of State after the Thanksgiving holiday. So no holiday for us, Betty. We're going to be watching that very, very closely.
NGUYEN: Hardest working woman in television news, I often say.
Thank you, Suzanne.
MALVEAUX: Thanks, Betty.
NGUYEN: Well, again, we expect President-elect Obama to formally introduce the leaders of his economic team at noon Eastern. You can catch the news conference right here on CNN.
And President Bush also talking about the economy today. In fact he is meeting with Treasury Secretary Henry Paulson right now. He's going to make a statement after that meeting and of course, we'll bring you those remarks just as soon as we get them.
In the meantime --
ROB MARCIANO, CNN, METEOROLOGIST: Hi.
NGUYEN: -- a few remarks from Rob Marciano. We were waiting for you, weren't we? Yes. That's all right. You need no introduction.
Take it away, Rob.
MARCIANO: Thank you, Betty. Yes, nice work there.
We've got some rain that's heading across the country. Eastern third actually just over the Mississippi River, heading into the Tennessee and Ohio River Valley. So this is really pretty rapidly towards the i-95 corridor. There's a little bit of snow with this, but not a whole lot. Winter weather advisory closer to parts of Michigan and Pennsylvania as well. Grand Rapids up to just towards the UP. This is quick moving. So what does fall shouldn't stick around that long.
We got some snow across parts of southern Wisconsin early this morning. But it didn't amount to a whole lot. Columbus back to Charleston, we're looking for some rainfall here. Some of it turning to snow at the higher elevations. Pittsburgh getting in the act there. And then the rainfall becomes a little bit more intense and the air mask becomes a little bit more unstable, you go national southwest to Jackson, Mississippi back to Shreveport across Mississippi and into the golden triangle of Texas. So that's where we'll see a little bit of action today.
It will be 49 degrees in New York, 53 degrees in Atlanta, 40 degrees in Chicago, 32 in Minneapolis, 73 degrees in Los Angeles. As far as what we're looking for later on today, this front again moving quickly to the east. Much of the west coast will be dry and quiet. We'll start to get a little bit of action across the Pacific northwest, and as we head towards the holiday, the southwest actually, specifically southern California may get a little bit of inclement weather. So that very well may be a trouble spot when we're looking at Wednesday and Thursday.
But tomorrow, Tuesday, some lake-effect snows will wrap up along this thing. And it will be continued cool across much of the eastern third of the country. Temperatures at or slightly below average across for the folks who live east of the Rocky Mountains. So there you go -
NGUYEN: Betty.
MARCIANO: Yes. I see you over there. Sorry
NGUYEN: All right. Rob, it's been a busy day. Thank you.
MARCIANO: All right.
NGUYEN: Simply a national security team. What key players will Barack Obama pick? We do have a live report from the Pentagon coming up.
(COMMERCIAL BREAK)
NGUYEN: A deadly bombing attack triggered by remote control. The bomber was a mentally disabled woman. That blast today outside the fortified green zone in Baghdad. It killed five people. An official in Baghdad says it is just the latest example of insurgents using mentally disabled women to carry out attacks. And it was just one of the three separate bombings that rocked the Iraqi capital this morning. A bus exploded in eastern Baghdad killing 13 people on their way to work. 19 people died as a result of all of the bombings today.
Securing Iraq and Afghanistan, they are the top priorities of President-elect Obama. So who is going to advise him on that front? Our Pentagon correspondent Barbara Starr joins us now.
You've been following that. Any word on who is up for the top spot?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, hello to you, Betty.
Lots of words, no formal announcements just yet. But CNN has learned that on Friday, Admiral Michael Mullen, the Chairman of the Joint Chiefs of Staff, flew to Chicago, had a private meeting with the president-elect for 45 minutes, a get-acquainted session. We're not being told exactly what they talked about. But Iraq, Afghanistan, certain to be on that list of topics is just another step in the whole national security team taking shape.
(BEGIN VIDEOTAPE)
STARR (voice-over): Barack Obama's potential national security team looks like an all-star lineup. Hillary Clinton on track to be secretary of state. Robert Gates may stay on as Secretary of Defense. Retired General Jim Jones is a leading candidate for national security adviser. And according to "The New York Times," Retired Admiral Dennis Blair may be named as director of National Intelligence.
But can so much high-powered talent really get along?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Are there downside sure when you have people of this mature stature there can be ego clashes. You know everybody's ego has to get in the same room. And at least one or two of those cases I'm sure people think that their egos are big enough to fill the room all by themselves.
STARR: Senator Clinton has applauded Gates' candor but early on put him unnoticed.
SEN. HILLARY CLINTON (D), NEW YORK: We need a strong secretary of defense, but that doesn't mean strong-headed.
STARR: And Gates --
ROBERT GATES, DEFENSE SECRETARY: One of the most important lessons in the wars of Iraq and Afghanistan is that military success is not sufficient to win.
STARR: Gates urgently needs the State Department to contribute billions of dollars in aid for Iraq and Afghanistan. But the real power broker may be retired Marine Corps four-star General Jim Jones, a former Middle East adviser, Jones is known as a strong commander. As national security adviser he would have to make sure President Obama not only gets the best advice but that the team plays together nicely.
PAUL BEGALA, DEMOCRATIC STRATEGIST: There's nobody stronger than a four star marine general and he would be able to take this team of rivals and play the role of integrating everybody together.
(END VIDEOTAPE)
STARR: And Betty, one more person on that all-star line up, of course, General David Petraeus still on active duty as the head of Central Command running the wars in Iraq and Afghanistan. He always had a direct line to President Bush. The question is, will he be on President Obama's speed dial?
Betty...
NGUYEN: All right. CNN's Barbara Starr joining us live.
Thank you, Barbara.
Well national security also the focus of a hearing today in a federal appeals court. At issue, 17 Chinese Muslims held at Guantanamo Bay Naval Base in Cuba and a federal judge has ordered them released into the U.S. because the detainees say they will be tortured if they return home to China. The Bush administration says releasing them here poses a threat. He wants to find another country to accept them. This case comes amid President-elect Obama's pledge to shut down the facility.
A promising possible new treatment for patients with DVT. Our medical correspondent Elizabeth Cohen has the details.
(COMMERCIAL BREAK)
NGUYEN: Well, your money may be your health. Dozens of deaths are linked to medications that are covered by Medicaid but have never been reviewed for safety or effectiveness. That's the disturbing finding of an analysis by the "Associated Press." OK, here it is. According to the A.P., between 2004 and 2007, Medicaid paid nearly $198 million for more than 100 unapproved drugs.
The medications slipped through a loophole and they hit the market before the Food and Drug Administration tightened its review of drugs in the early 1960s. Well, Medicaid officials acknowledge the problem and the FDA is trying to squeeze the medications off the market.
In other news though, it has been three years since Hurricane Katrina, but we keep hearing stories about people suffering. According to "USA Today" children living in FEMA trailer parks provided after the storms, they are battling serious health issues. After reviewing medical records, more than 250 children living in a federally-funded trailer park, they found nearly half of the kids have iron-deficiency anemia. They also found 55 percent of elementary school children have a behavior-learning problem and a quarter of the children studied, well they carry a cluster of respiratory, skin and allergic illnesses. Well we do have some promising news. A promising new treatment for people with deep vein thrombosis also known as DVT. CNN medical correspondent Elizabeth Cohen joins us now with that.
All right. So what does the study show? I hear there's positive news and we always like to hear that.
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: It was a small study, but it does, it is a bit of positive news for people who suffer from deep vein thrombosis. Let's take a look at what that is first. That's not necessarily something that everybody knows. What it is is you have a blood clot that starts here in the leg and it travels up to the lung, and it can actually kill you if it gets to the lung, and it's a huge, it's a huge problem.
So what you want to do, what's interesting here that they found is that they give people drugs to get rid of that clot. But in addition they gave people ultrasound. And the sound waves from the ultrasound seemed to break up that clot, and the drugs could work better.
NGUYEN: Really. That's good news especially you know, we're heading into the holiday season, a lot of us traveling, getting on planes, getting in cars for hours on end. What can be done?
COHEN: Right. It's a problem if you're sitting in a plane with your legs all crunched up like this. It's called economy-class syndrome for a reason and if you're sitting in that plane for a long period of time, what can happen is those clots can form and then travel to the lungs. So let's go over what you can do to try to prevent deep vein thrombosis from happening in the first place.
NGUYEN: Give it to us.
COHEN: There you go. Well the first thing you can do is move around. Get out of that airplane seat or get out of that car seat as much as you possibly can. Also beware of redness or warmness that's happening in your legs. Don't just say, oh it's no big deal. Feel it. If it's red or warm to the touch, that could be bad news. And the third thing you want to do is wear compression stockings if your doctor recommends. It's sort of those, kind of like old lady stockings.
NGUYEN: They're not so cute.
COHEN: They're not so cute but right if they can save your life that's a good thing.
NGUYEN: Absolutely.
COHEN: They can help clots from forming.
NGUYEN: All right. Some good advice and some positive news.
COHEN: That's right.
NGUYEN: Thank you, Elizabeth.
Listen to this, doctors said she would never walk. Not only is she walking, she is swimming on a team.
(BEGIN VIDEO CLIP)
ANNA AMEND, SWIMMER: I really like the Olympics because I watch swimming. And it was really cool.
UNIDENTIFIED FEMALE: Do you think you could do that one day?
AMEND: I'm hoping I can.
(END VIDEO CLIP)
NGUYEN: Hoping. Well, Anna Amend was born with one arm and a stunted leg but she does not let anything get in her way. She doesn't need hope. She is doing it. Her parents brought her home to Ohio from a Ukrainian orphanage when she was just three years old. Not only has she thrive but she is also got a terrific attitude. Listen to this, as she told her mom after visiting a hospital, it would be hard to be a person with a disability. I'm glad I don't have one. And she's proving that she doesn't.
Well tough economic times they do mean cutting back for a whole lot of us. But will that plan be in place for holiday shoppers? A prediction from the experts.
(COMMERCIAL BREAK)
NGUYEN: Well, Citigroup became the latest financial institution to need its own government rescue plan. Let's get the latest now from Susan Lisovicz at the New York Stock Exchange for the latest on how the market is responding to the plan that was hammered out last night.
So far looking pretty good, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Yes, just looking at the board I think you have the answer, Betty. Citi shares up big time as the government backs $300 billion worth of bad loans and buying stock in the ailing bank.
Investors abandoned Citi shares last week, sending the price down more than 60 percent and sending management scrambling for aid. In return for the guarantee, the government gets $250 million preferred shares with an eight percent dividend. The government also gets a warrant or the right to buy more shares. The taxpayers are on the line for potential losses. And they could be big losses if this doesn't work out -- Betty.
NGUYEN: All right. Explain this to me. I mean wasn't the government's initial bailout plan designed to keep all this from happening to companies like Citi?
LISOVICZ: Yes. These are you know unchartered waters.
NGUYEN: That's what they all keep saying.
LISOVICZ: Yes, I mean what's happening. I mean we just see you know an extraordinary thing happening this year. I mean first of all the government pushed Bear Stearns into the arms of JP Morgan. It outright seize Fanny Mae and Freddie Mac and AIG and this one is sort of a hybrid program, but originally the TARP program was to buy bad assets from banks directly. And investors like the plan for Citi, because Citi owns a lot of troubled assets.
But then, Treasury Secretary Paulson as well know switched strategies to inject money directly into banks. Citi got $25 billion. It's a lot of money, but not enough for Citi. So investors dumped the shares. Now that the government is doing this emergency program for Citi, just crafted for Citi alone, Citi shares are rallying, they're up 60 percent. Citi shares were down 60 percent last week. These are the times we live in, Betty.
Stocks overall, up as well. President-elect Obama expected imminently to announce his economic team. Reports say he's working on a new stimulus plan that could be ready for him to sign once he takes office. That is welcome news. The market was deeply unsettled last week by what it perceived as a power vacuum, in addition to the concerns about Citi. And the Dow right now, up nicely. 297 points right now. That's 3.75 percent. The NASDAQ and the S&P 500, up four percent.
Yes. The street likes the news, Betty. No question.
NGUYEN: Yes. And we like it that the Street is a positive territory today. Thank you for that. We do appreciate it.
LISOVICZ: You're welcome.
NGUYEN: And about an hour and a half from now we do expect President-elect Obama to walk in and announce the latest on his economic team. And when that does happen at noon Eastern, we will bring that to you.
In the meantime, though. Want to get you more information on this Citigroup bailout and what it means for you, the consumer. So, don't go away.
(COMMERCIAL BREAK)
NGUYEN: Well, the holiday shopping season is here. So, will your wallet go into hibernation? There is a new report out this hour and it's predicting a grim season for retailers and those who rely on them for their paychecks. Let's get right to it. CNN's Christine Romans is in New York to explain all of this.
You know, we kind of saw it coming, though.
ROMANS: Yes. And there have been other surveys that have shown something similar. And that is an unusual desire, a strong desire to tighten their belts from American consumers. We think this could be the first holiday in many, many years for people to actually spend less money than the year before. That's something that American consumers rarely do. Record numbers of all ages plan to cut back on expenditures. That's bad news for the economy. The survey of 1,000 people by the Consumer Federation of America and the Credit Union National Association said, usually about 30 to 35 percent of folks say we plan to cut back. This year it's 55 percent of people say they plan to cut back. And 27 percent say they're going to cut back very, very sharply.
Another survey that we just had from America's Research Group said that couples are planning on not giving each other gifts and instead, giving to their children so they can have the same level of gifts as the year before and the year before that. So, they don't want to cut back on their kids, but that means they're going to cut back on each other.
This is bad news for the economy, frankly. But, it's good news if you're a consumer. And this is how. If you're a consumer who doesn't have tens of thousands of dollars of credit card debt. If you can make your monthly debt payments and you're not living literally paycheck to paycheck, you're going to see some major, major cutbacks.
Some of these retail chains are already telling us they know they're going to have to deeply discount to get you to come in for your business. They know online they're going to have to cut their shipping fees. We've already seen toy stores and toy prices already slashed to get you in there.
And think of this, Betty. Christmas falls on a Thursday, this year. So I've been asking retail experts, you know, should I be shopping the day after Thanksgiving, should I be shopping at the last minute? Should I be shopping online. I mean, how should a consumer really play smart in what is a pretty grim situation for the retailers? And a lot of people are telling me that that Monday, Tuesday, Wednesday before Christmas, you're going to see retailers pretty desperate cutting their prices.
NGUYEN: Really? So, it's not the day after Thanksgiving anymore.
ROMANS: Well, they'll be cutting them then, too. I can guarantee you. I mean these retailers have been telling us that they're going to try to get you in --
NGUYEN: Well, standby. Because we've got to get this is. The president is making remarks after speaking with Treasury Secretary Henry Paulson.
Let's listen.
(JOINED IN PROGRESS)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... Concerns about jobs. Concerns about their savings accounts. This is a tough situation for America. But, we'll recover from it. And the first step to recovery is to safeguard our financial system.
Last night on Air Force One, coming back from Beirut, I talked at length to the secretary about his recommendation on the decisions made to safeguard Citigroup -- Citicorp. We have made these kind of decisions in the past. Made one last night. And if need be, we're going to make these kind of decisions to safeguard our financial system in the future.
I talked to President-elect Obama about the decision we made. I told the American people and I told the President-elect when I first met him that any time we were to make any big decision during this transition, he will be informed. As will his team.
Secretary Paulson is working closely with the President-elect's transition team. It's important for the American people to know that there is close cooperation. It's important for the American people to know we will safeguard the financial system as the first step necessary for financial economic recovery.
And Mr. Secretary, thanks for your hard work. Appreciate it. Thank you.
NGUYEN: And there you have it. Remarks from President Bush after a meeting with Treasury Secretary Henry Paulson, talking about the financial situation and the crisis that a lot of companies are facing.
Let's go now to CNN's Kathleen Koch, who is waiting at the White House.
Kathleen, we just heard the president speak. What are you hearing where you are?
KATHLEEN KOCH, CNN CORRESPONDENT: Well, Betty, I was just there actually, where the president spoke. And as soon as he wrapped I shouted a question at him. I said, Mr. President, what a lot of Americans are concerned about Citigroup, where does this end?
Because, again, this new injection of some $20 billion, it's got a lot of people wondering. So, in another two or three weeks, a month, will there be another 10, 15, 20 billion? And then there are those in Detroit, the auto makers saying, well, hey, what about us? We're only asking for $25 billion. That which was already promised to them in legislations back in December of 2007, granted at that time to help them retrofit to make more fuel-efficient cars.
But, it's raising just a lot of concerns. Where does it stop? Detroit is saying, what about us. Citigroup, obviously the White House believes is one of those massive banking giants that just is simply too big to fail. That it could bring the entire U.S. financial system down with it.
But, the president ignored my shouted question about Americans' concerns about his continuous pumping in of taxpayer dollars into these private institutions. It just keeps on going. And a lot of people, obviously, are very concerned. NGUYEN: No doubt about it. All right. CNN's Kathleen Koch.
Thank you for that.
KOCH: You bet, Betty.
NGUYEN: We want to go now to CNN's Gerri Willis, to get the consumer angle on this. What does this mean for me and you?
And Gerri, you're joining us live now from New York. So what does it mean as we hear about more money being pumped into Citigroup?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, Betty, you know the government is standing behind Citi. There's obviously no buyer here. The government is guaranteeing bad investments and even investing $20 billion on what they've already put in.
So for depositors, this means no changes to your checking account or any other account you might have there. However, if you do have an account at Citibank, you want to make sure you're within those FDIC coverage limits.
Here is a breakdown of what they are. Take a look at this. For a single account, it's $250,000. For a joint account it's $250,000 per co-owner. And for retirement accounts it's another $250,000 per co-owner. What you should know though is that FDIC insurance doesn't everything. It doesn't cover stocks, bonds, mutual fund shares, life insurance policies or annuity. So, if you're investing, those moneys are not backed by FDIC. The regular old-fashioned deposits are -- Betty.
NGUYEN: All right. So, you know, there's (INAUDIBLE) an obvious issue for customers. If Citi and other banks benefit from the bailout, I mean, where does it leave everybody else? I mean, what is this, how does this work?
WILLIS: Well, you know, I think the big thing for consumers right now that they need to pay attention to with their banks are bank fees. They're high, they're rising. Not only for these institution getting taxpayer bailouts, but others as well.
They're all charging you sky-high fees. Consider Citigroup. The company that's being paid attention to today because of their big bailout. It's raising interest rates on 1/5 of 54 million credit card holders, or about 10 million people by 2-3 percent. So, they're getting bailout money on the one hand and you're paying them more in fees on the other.
Consider these results from a new bankrate.com survey. Record fees in 2008, this is from all banks. Bounced check fees up 2.5 percent. The interest checking minimums, that's if you have an interest-paying checking account. The minimums you have to have on hand to get the money, up 4 percent. ATM surcharges -- if you use an ATM out of network, up 11 percent.
So, hit's just outrageous here. You're paying on the one hand, through your tax dollars to there bailouts. And on the other hand through higher fees. If you have questions send them to me at gerri@CNN.com. We'd love to see what your latest outrage might be.
Questions? You're probably going to get complains. Just listening to that, I mean you're paying out of all ends. And what do you get in return? Well, we're getting an investment. We'll see how that plays out.
WILLIS: Exactly right, Betty.
NGUYEN: Thank you, Gerri.
Well, as the most serious credit crisis in decades drops your finances, CNNMoney.com has some advise and some answers, which we all need right about now. Check out our special report, America's Money Crisis. That is on CNNMoney.com.
(COMMERCIAL BREAK)
NGUYEN: All right, so many health-conscious Americans check food labels for carbs and fat. But what about checking for carbon? Yes, carbon. It's a new idea that is hitting the store shelves. And it will allow shoppers to know how the products that they're buying actually contribute to global warming. CNNMoney.com's Poppy Harlow has our Energy Fix from New York.
I kind of like this idea. Don't know a whole lot about it, but just that alone has me interested, Poppy.
POPPY HARLOW, CNNMONEY.COM: We'll explain it to you. Shoppers can actually do their part. It's something called carbon labeling. The idea here really to measure how much CO2 is admitted into the atmosphere when a product is made, everywhere from the assembly line to when it hits the store shelf. The info is then put right there on the label so you know before you buy.
Now shoemaker, Timberland, they are doing this. They're going all the way back to the cow, measuring the environmental impacts of making the leather. That's what you'll see on boxes of Timberland shoes and boots.
Also, Tasco, that is basically the Wal-mart of Britain. They're carbon labeling some of their food products. And Patagonia is doing it as well. That company's Web site, we pulled it up for you here. It shows exactly where its jackets and shoes are made. You see the footprint chronicles right there and the chemicals that are used in the manufacturing process. And then they're tracking how they travel around the world before they get to your store.
The problem, though, there's no standard for this, no one number as a base for all of this. Each company, Betty, has to make their own calculations.
NGUYEN: All right, so let's get down to it, then. If there is no industry-wide rating system, how accurate is it?
HARLOW: That's a big question. That's a big criticism.
There is not really a blanket standard. It's impossible to compare various products. One organization, it's the UK-based Carbon Trust. They are developing a ratings system. So far, though, only a few big names are participating, companies like Cadbury, Schweppes, Coca-Cola, Kimberly-Clark and Coors -- Betty.
NGUYEN: OK. And until a full plan is worked out, what can we do to learn about the products that we buy?
HARLOW: Right. There are no labels on a lot of the products you buy every day. A few things you want to keep in mind, anything from a cow, cheeseburgers to leather coats and anything in between, if you're eating those or wearing those, you leave a big carbon footprint. It takes a lot of energy to raise and feed cattle. The process of packaging all that meat, think of the plastic and the styrofoam on your ground beef -- it takes a lot of energy.
You can check out -- a lot of company's carbon footprint if you go to this Web site, epa.gov/stateply, or cdproject.net. You can go on those Web sites. You can check it out first. But it is interesting, some companies trying to do their part -- Betty.
NGUYEN: All right. Poppy Harlow, as always we do appreciate it.
Today is the last day to buy that frozen turkey to have in time for Thanksgiving. And if you're going to the grocery store, the coupon mom has some tips for you. We spoke to Stephanie Nelson a little bit earlier about shopping for Thanksgiving and the holidays.
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STEPHANIE NELSON, "THE COUPON MOM": The good news is that the stores and the manufactures know what we make for Thanksgiving.
NGUYEN: Right.
NELSON: So all the traditional ingredients are on the front of the store advertising circulars and they are at rock bottom prices. So as long as you spend a little bit of time at home looking at a couple of the store circulars, you can pick the store with the lowest prices and really save.
We're seeing a lot of coupons and we're also going to see competitive price matching. So ask your store if they'll match competitors's prices. And also, stores will accept their competitors' coupons. So even if you can't find a coupon for your store, you might find their competitor's coupon and see if they'll accept that.
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NGUYEN: So do you want more information? Here is what you do. You check out Stephanie's Web site, couponmom.com.
Some relief at the pump. Listen to this, two months and counting. And for the 68th straight day the nation's average price of gas has fallen. Today's figure just under $1.91. That's a drop of more than two cents from the day before. Today's prices shows that they've fallen more than 53 percent since the July record.
And there is a little bit of a silver lining in the clouds for travelers this year. Flight delays have fallen sharply this season. That is according to a report in "USA Today." Industry experts say reductions in flights by financially strapped airlines, combined with government efforts to ease congestion, especially at busy airports, could find many travelers giving thanks this season.
Well there are still huge problems and huge expectations that are awaiting the president-elect. If he stumbles, he will not be the first. Some cases in point from the resent past.
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NGUYEN: Presidential pitfalls as Barack Obama shapes his administration. CNN special correspondent, Frank Sesno, looks at some classic White House blunders that he might want to avoid.
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FRANK SESNO, CNN SPECIAL CORRESPONDENT: Barack Obama, student of presidential history.
BARACK OBAMA (D), PRESIDENT-ELECT: I've been spending a lot of time reading Lincoln. There's a wisdom there and a humility about his approach to government.
SESNO: Obama might also find it helpful to study recent presidential experience to avoid mistakes that could hurt a chief executive right out of the gate. Lesson one, don't overreach and don't be naive. That was a big part of young John Kennedy's problem just three months after he was sworn in with the CIA's disastrous Bay of Pigs invasion of Cuba. Kennedy took the fall.
Lesson two, know your audience. Bill Clinton learned that the hard way when just a month on the job he proposed a sweeping new energy tax.
WILLIAM JEFFERSON CLINTON (D), FMR. PRESIDENT OF THE UNITED STATES: I recommend that we adopt a BTU tax on the heat continent of energy.
SESNO: He had a Democratic House and Senate, but he miscalculated. After four months of lobbying, Clinton withdrew the proposal, politically bruised.
Lesson three, timing matters. Clinton again, this time gays in the military, Don't ask, Don't tell. It generated an angry controversy early on that the president's adversaries never forget.
Lesson four, people matter, especially here. Ronald Reagan saw that when his national security adviser, Richard Allen, became radio active because of a few expensive gifts he accepted. Allen had to resign. Lesson five, don't micromanage. Jimmy Carter comes to mind. In the early days, he would pour over budgets, read legislation all the way through, even review requests to use the White House tennis courts. He became known as a myopic-micromanager.
Valuable history lessons for Barack Obama. Because if anything, the world he'll face is more complex and more inclined to rush to judgment.
(on camera): To prove the point, here's another lesson. Public support revolves around perceptions of a president's credibility and competence. Weapons of mass destruction in Iraq and Hurricane Katrina come to mind. Just ask George W. Bush.
Frank Sesno, CNN, Washington.
(END VIDEOTAPE)
NGUYEN: And speaking of President Bush, wrapping up three years of close cooperation tonight at the White House. He is hosting Israeli prime minister, Ehud Olmert, for dinner. Among the likely topics, Israeli/Palestinian peace talks and what could be the latest threat to the region, Iran's nuclear program.
In Venezuela, an important test for one of Washington's harshest critics. Candidates from the party of President Hugo Chavez have won a majority of seats. In all, pro-Chavez candidates won the gubernatorial races in 17 of 22 states. Members of the opposition party, however chalked up some important wins, including the mayor's office in the capital city of Caracas. Yesterday's elections were the first since Venezuelans defeated last year's referendum that would have allowed Chavez to run for his third six-year term.
He is bringing in the captains of his economic team and revealing his game plan. We're waiting on Barack Obama's news conference. That is in the NEWSROOM.
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NGUYEN: Not only that, it is a stirring sign of the times. Colorado farmers hoping to share a good harvest with people in need. Listen to this, though. Some 40,000 people descended on the fields and stripped them clean. The potatoes, onions, beets, carrots, they were expected to last all weekend at least that. But instead they were gone within one hour. Gives you an idea of the need out there.
Well the sputtering economy is hitting home for many Americans. Bills, they keep growing, paychecks shrinking or even disappearing. Now, food banks are also struggling to keep their cupboards from going bare.
CNN's Thelma Gutierrez has that story.
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THELMA GUTIERREZ, CNN CORRESPONDENT: Early morning at the Mend Food Bank in Pacoima, California.
UNIDENTIFIED MALE: Only one line, OK.
GUTIERREZ: The lines begin to form before the doors even open.
MARIANNE HAVER HILL, EXECUTIVE DIRECTOR, MEND: Every week we seem to be breaking new records as far as the number of people served.
GUTIERREZ: It's the same concern at food banks across the country.
UNIDENTIFIED MALE: Yes, there will be a hard time coming.
GUTIERREZ: You don't have to look far to find people who recently had to turn to charity to feed their families.
SHERYL GUTHRIE, FOOD BANK CLIENT: I never thought I would be in this position that we're in now. I never thought that things would get this bad.
GUTIERREZ: The downslide happened fast for Greg and Sheryl Guthrie and their three kids. Six months ago, Greg was laid off as a fork lift operator. When his unemployment benefits ran out, the Guthries had to live off of Sheryl's disability checks. The math tells the whole story. She gets $1,600 a month. The rent is $1,350. That leaves the family $250 for food, fuel, and everything else.
GREG GUTHRIE, FOOD BANK CLIENT: It's a humbling experience being a man, going in there, saying that I really need help, my family can't stand right now.
GUTIERREZ: Judia Cox (ph) had to leave her job working in a prison kitchen to care for his sick mother. Now the family's finances are collapsing and it's taking a toll on her daughter.
DIAMOND MCCLAIN, 15 YEARS OLD: It's just been really hard. I've shed so many tears. It's crazy; it's unbelievable.
GUTIERREZ: Stacy Ortiz is also new to the food bank system. She lost her job as a county worker and is now cleaning homes. But that work isn't steady enough to help her get back on her feet.
STACY ORTIZ, FOOD BANK CLIENT: We rent a room and the utilities included. But we're a little behind on the rent. So we're making it, but it's real tight. Everything is real tight.
GUTIERREZ: With more than 10 million Americans now out of work and companies struggling in the economy, experts say food banks may have a tougher time finding donors.
UNIDENTIFIED MALE: Given what has happened with our economy over the past eight to ten weeks, there are some challenges ahead.
GUTIERREZ: Regional food banks like Second Harvest in San Bernardino say corporate donations haven't stopped yet. They now feed 250,000 people a month. But that number is going up, so there may be less food to go around.
For now, Greg Guthrie gives thanks for the help he's receiving.
Thelma Gutierrez, CNN, San Bernardino, California.
(END VIDEOTAPE)
NGUYEN: Well it was a gala attended by stars all to honor people like you who are making a difference in their communities. We taped the CNN Heroes special this weekend in Los Angeles. You can watch it Thanksgiving night to see who you voted as CNN's hero of the year. Really, this is a wonderful initiative. You can learn their amazing stories and dare to be inspired by all 10 of these heroes. Anderson Cooper hosts CNN Heroes, An All Star Tribute. That is Thanksgiving night, 9:00 Eastern, only on CNN. A fantastic show.
I'm Betty Nguyen. Join us again tomorrow morning starting at 9:00 a.m. Eastern.
For now though, CNN NEWSROOM continues with my good friend, Tony Harris.
