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High Noon for Detroit; States in Need; Interview With FDIC Chair Sheila Bair
Aired December 02, 2008 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: It is Tuesday, December 2nd. And here are the top stories we're following for you in the CNN NEWSROOM.
The number of delinquent mortgages surging again today. I will talk with FDIC chairman Sheila Bair live this hour about her plan to slow the foreclosure epidemic would work.
The bill three said show us the money. Congress said show us the plan. The automakers roadmap to profits due on Capitol Hill by the end of the hour.
She picked up the toddler and walked out, practically daring the terrorists. The nanny saves a child after the parents are shot dead, one of the many family tragedies in the Mumbai attacks.
Good morning, everyone. I'm Tony Harris.
And you are in the CNN NEWSROOM.
No more asking are we there yet? Economists confirming what most of us already believe, the U.S. is in recession, has been since last December. The question is, what now? Treasury Secretary Henry Paulson says it's about focus and flexibility.
(BEGIN VIDEO CLIP)
HENRY PAULSON, TREASURY SECRETARY: Until the financial crisis is behind us, we must remain vigilant, ready to respond to and to manage unpredictable events as they occur. Our first priority is on recovery.
We work every day fully aware of our awesome responsibility to the American people, who depend on the financial system to save for college and retirement, for financing homes, cars and companies. I am confident that we will work through this difficult period and opportunity and prosperity will again flourish.
(END VIDEO CLIP)
HARRIS: Paulson says the government is looking for more ways to tap into the $700 billion financial rescue program.
Lawmakers find out today just how the Treasury Department has handled the bailout money so far. The first audit of the rescue plan goes to Congress. The Government Accountability Office has to submit regular reports to lawmakers. That is part of the oversight required by Congress when it approved the plan.
The country in recession. Businesses, governments and homeowners hurting and looking for help. And we are covering it all for you.
Auto industry execs facing a deadline today in their appeal for financial aid. Governors meeting in Philadelphia, asking President- elect Obama for assistance.
And what about homeowners facing foreclosure? We will talk with the FDIC chairman in just a few minutes about her plan to help you.
First, high noon. High noon on Capitol Hill. Next hour, the deadline for the big three automakers to give Congress their plans to retool the companies. If lawmakers like the roadmap, Detroit may get federal help.
CNN's Kate Bolduan is on Capitol Hill.
And Kate, let's get this straight. We get the show portion of the program by the end of this hour. Ford gets in a little early. The tell part comes later in the week, is that correct?
KATE BOLDUAN, CNN CORRESPONDENT: It's just going to be an ongoing show for your and my enjoyment, as well as everyone else.
So what we have right now, today is the deadline, as you said, Tony. And here is the first of the three plans, the proposals from the big three.
This is Ford's. They just put it out. It's titled "Ford Motor Company Business Plan." It can't be more simple than that.
It's about 30 pages long, as we had expected. And it lays out some -- just to highlight some of the big points that is within. In the detail, Ford is asking for up to $9 billion -- accessing $9 billion in financing. And here it says they will sell their corporate jets, they will accelerate plans for electric cars, as well as other fuel-efficient vehicles. And it also does mention that the CEO will take -- will be willing to accept a $1.00 annual salary if they do get these loans.
So there are some of the highlights. But we're expecting some more detail throughout, as well as some tough questions later in the week, when Ford, as well as Chrysler and GM CEOs, head back up here to Capitol Hill to answer another round of tough questions in another round of hearings.
Now, as you mentioned, Tony, it's been an ongoing story. This is just -- where are we? Two weeks now. Two weeks ago is when Congress sent automakers home empty-handed and said, hey, you really didn't prove yourself. We have a lot of unanswered questions, simple questions about how much money you have, how much money you need, and how will a loan ensure your long-term viability?
Questions that they really want answers to, as well as, how are you going to safeguard taxpayer money? Well, they're hoping that these proposals do put some of those questions to rest.
And we also are hearing from a source close to the GM negotiations with Congress that they will be submitting their plan around 3:00 or 4:00 Eastern today. So we're now going through this, as well as the committees themselves, looking towards hearings at the end of the week -- Tony.
HARRIS: All right. Kate Bolduan for us on Capitol Hill.
Kate, appreciate it. Thank you.
Chrysler is rallying port (ph) workers in Baltimore today, hoping to drive home a point, to show Congress the auto industry reaches far beyond Detroit and the demise of any of the big three would be devastating to the national economy.
(BEGIN VIDEO CLIP)
JIM PRESS, PRESIDENT, CHRYSLER LLC: We've been working through the restructuring process. Just about the point in time in June when we were beginning to make progress is when all of these effects of the fuel situation and the credit hit us, and we really started to get into a position where we needed some assistance from a standpoint of credit and a loan. And that's really all we're asking for at a time when, of course, credit isn't available to anybody, and that's really what the pinch is.
Our customers don't have credit. Our dealers don't have credit. We don't have credit. And all we need is this loan to bridge through, and we can see our plan come to fruition.
(END VIDEO CLIP)
HARRIS: Then Chrysler plans similar rallies in other cities.
From the auto industry's troubles to your personal finances, on CNN's "LARRY KING LIVE" author and money expert Jean Chatzky and CNN's chief business correspondent -- you know him -- Ali Velshi talked about what to do in these tough times, like making sure you can really afford it before you spend it.
(BEGIN VIDEO CLIP)
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Extending yourself and helping the economy is a good thing if you can afford it. We have found out what happens when you can't afford it.
With the danger of losing your job, Larry, I think you have to be very, very careful. So, as Jean said, while some people might be reining themselves in, their inability to get credit might actually be reining them in as well. People just can't overextend themselves, and those who can should really think twice before doing that right now. Protect yourself.
JEAN CHATZKY, MONEY EXPERT: When it comes to those credit cards, ask yourself how you're using them. And if you're using them as a tool that you're paying off on a month-to-month basis -- that's how I use my credit cards, I'm sure that's how Ali uses his -- that's an OK thing to do. But if you're getting yourself into a situation where you know you're going to be paying it off into January, February, March, then you want to pull back a little bit.
And I think that the best piece of advice right now, the most aggressive, good piece of advice that we can give people, is to look at their mortgage. Mortgage rates have dipped down to about 5.5 percent. And if you're sitting with a loan that's anywhere above 6 percent, you may be able to free up a little bit of cash flow by going back to the well, by refinancing, which is not to say, by the way, that you want to use that home as a piggybank once again. It's just to give yourself a little more of an emergency cushion.
(END VIDEO CLIP)
HARRIS: And here's the other thing. Chatzky says you should focus on areas of your finances you can control, like how much you spend and how you allocate your investments.
And coming up in about 10 minutes right here in the CNN NEWSROOM -- we're really excited about this -- FDIC chairman Sheila Bair. I will talk with her about ways to stop the foreclosure epidemic and keep families in their homes and keep monthly payments flowing to banks.
States in need. The recession forcing governors to cut services and lay off workers. Today the governors are asking President-elect Barack Obama for help.
Suzanne Malveaux live from Philadelphia, where the National Governors Association is meeting.
And Suzanne, good to see you.
Governor Ed Rendell was quick to make the point this morning that the governors are not begging for money. What the governors really want, according to Ed Rendell, from Washington is a jobs program, an infrastructure program.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, that's right. I mean, certainly when you say begging for money, it sounds like they're not really responsible for anything.
HARRIS: Yes.
MALVEAUX: And he was saying that obviously they're going to take some responsibility, and what they want to do is create jobs. But they say they need some help.
They need a piece of the pie here. You're talking about a $500 billion economic stimulus package potentially passed in January. Well, how much of that is going to go to the states?
The governors are asking for about a third of it, $176 billion. And they say here's what's going to happen -- we're going to take that money and we're going to invest it in these roads and bridges, building things, sewer and water projects, that type of thing. And it will create jobs for the states. That is the argument that they're making.
Barack Obama today acknowledged that there's going to be some real tough times and some tough decisions for these governors. He said that 41 out of the 50 states or so expect budget shortfalls. So obviously he knows that he's not going to make everybody happy here. But he did, Tony, reach out to the governors, said he wants to work with them, and he specifically wanted to reach out to the Republicans.
Take a listen.
(BEGIN VIDEO CLIP)
BARACK OBAMA (D), PRESIDENT-ELECT: A special message I want to deliver to my Republican colleagues who are here. I offer you the same hand of friendship, the same commitment to partnership as I do my Democratic colleagues.
There is a time for campaigning and there is a time for governing. And one of the messages that Joe and I want to continually send is that we are not going to be hampered by ideology in trying to get this country back on track. We want to figure out what works.
(END VIDEO CLIP)
MALVEAUX: Tony, interesting enough, to take a look at the crowd who has gathered there, obviously Governor Sarah Palin was one of those people that he was obviously addressing, Governor Bobby Jindal from Louisiana. Quite a mix of people in that room.
Now, the question is, are they going to get what they want? Well, we'll have to wait and see.
The last time, one of the things that they were asking for is an increase in the federal Medicaid funding, that they pick up more of the costs. And that didn't happen the last time around when there was an economic stimulus package. It essentially died in Congress. Now people are thinking that perhaps in January, there's a better shot at getting that through.
HARRIS: All right. Suzanne Malveaux for us in Philadelphia.
Suzanne, great to see you. Thank you.
And this just in. Florida Republican Senator Mel Martinez holding a news conference this hour. CNN confirms Martinez will not seek reelection. We will listen to and monitor that news conference.
The senator is expected to take some questions from reporters as well. And we will turn some of that sound around for you a bit later here in the CNN NEWSROOM.
Recession, foreclosure, default. FDIC chairman Sheila Bair is back in the NEWSROOM to discuss the economy. Your issue #1, it's next.
(WEATHER REPORT)
(COMMERCIAL BREAK)
HARRIS: Smart investors looking for deals on stocks this morning. Take a look. All the buying sending the Dow Jones industrials higher.
As you can see, the Dow with a nice rally going on right now, 148 points, almost two hours into the trading day. News that the U.S. is officially in recession sent stocks into a real tailspin yesterday. The Dow lost almost 8 percent of its value.
Put this another way, a trillion dollars in wealth simply disappeared. Boy.
Calling all men -- shop 'till you drop. Retailers hoping male shoppers can help turn around the holiday buying season. A hint here -- we want electronics and we want to spend next to nothing on them.
Here is CNN's Jason Carroll.
(BEGIN VIDEOTAPE)
JASON CARROLL, CNN CORRESPONDENT (voice-over): In uncertain economic times, who could fault retailers for trying something new to boost holiday sales? A popular toy, a new gadget. This year, they're betting on people like Christian Harmon...
CHRISTIAN HARMON, SHOPPER: I can't spend too much this holiday season.
CARROLL: ... and Mike Fiorvanti.
MIKE FIORVANTI, SHOPPER: I'll spend as much, if not a little bit more, than last year, maybe.
CARROLL: Male shoppers buying for themselves and others, and it's adding up. Figures show sales of men's apparel rose one percent to $4.3 billion during the first nine months this year, compared to sales of women's apparel which fell six percent to $15.1 billion during the same period.
DAVID FISHER, EXECUTIVE VP, BLOOMINGDALE'S: The suit business has been exceptionally well.
CARROLL: Stores like Bloomingdale's are tailoring their spaces
FISHER: We renovated this area and making more room for men's wear.
CARROLL: Oh, these look nice.
FISHER: This business in this flagship store, there are 16 point variances. So, yes, it's worth doing. CARROLL: Others are joining in. J. Crew opened two men's only stores this year.
ERIC BEDER, BREAN MURRAY CARRET & CO. LLC: As men step up to the plate and really assert what they like, what they buy, that drives more business.
CARROLL: Even the luxury market has taken note. Louis Vuitton added a new line of men's luggage and accessories. This month, Versace unveiled suit carriers and briefcases. But some analyst say turning a profit in a troubled economy won't be easy.
JOSEPH FELDMAN, TELSEY ADVISORY GROUP: I think it's going to be a tough holiday season anyway you slice it.
CARROLL (on camera): Men can save this holiday shopping season.
FISHER: That could be a tall order. That could be a tall order. We did have a good weekend and there is no spin in that. We had a good weekend. We had a good Wednesday, we had a good Friday, and a good Saturday.
CARROLL (on camera): When consumers cut back on spending in October, the men's category did take a hit. But the 8.3 percent drop in sales for that month wasn't as steep as the 18 percent dip that women's apparel took.
Jason Carroll CNN, New York.
(END VIDEOTAPE)
HARRIS: A recession, foreclosure, default. FDIC chairman Sheila Bair is back in the NEWSROOM to discuss the economy, your issue #1. It's next.
(COMMERCIAL BREAK)
HARRIS: More and more people are falling behind on their mortgage payments. TransUnion, one of the big credit bureaus, says the number of homeowners 60 days late shot up in the third quarter from 2.5 percent last year to almost 4 percent now. That means roughly one in every 25 mortgages out there is delinquent. One in 25.
TransUnion predicts things are only going to get worse. It sees a delinquency rate at a staggering 7 percent -- 7 percent -- at the end of 2009.
Here's the deal. Foreclosure makes a family homeless and a bank poor. It is a lose-lose situation. The FDIC is promoting a plan to keep people in their homes -- change the terms of their mortgages. Call it the IndyMac model.
The FDIC took over the bank and hundreds of thousands of its mortgages in July. In August, the agency began modifying some of those mortgages. Lenders kept payments at 38 percent of a homeowner's income. Homeowners may get a new interest rate, perhaps as low as 3 percent. Repayment terms could go up to 40 years.
Let's talk to FDIC chairman Sheila Bair. She is in Washington.
Sheila, it is great to have you back on the program. I've been lobbying for this.
SHEILA BAIR, FDIC CHAIRWOMAN: Thank you. Nice to be back.
HARRIS: I've been screaming at Henry Paulson. I hope he's listening.
And also, let me bring in CNN's Susan Lisovicz. She is at the New York Stock Exchange.
BAIR: OK.
HARRIS: And Chairman Bair, TransUnion says the number of homeowners 60 days late shot up in the third quarter. In addition to job losses, clearly people are getting crushed by adjustable rate resets.
BAIR: Yes, they are.
HARRIS: What is your reaction to this news?
BAIR: Well, I think we're behind the curve and we're falling farther behind the curve. Delinquencies are picking up. And a lot of it is due to these option ARMs and other nontraditional mortgages with lower introductory periods, and the resetting to significantly higher payments.
They need to be modified. They need to be restructured so that people can stay in their homes.
As you pointed out in your introductory remarks, generally you can modify a loan if the family has a reasonable income, support a reasonable mortgage payment. It makes more sense to restructure the loan, lower the payment, and keep them in their home, as opposed to putting another house into foreclosure in a very overburdened housing market already.
HARRIS: Yes. Well, let's talk about what we're calling the IndyMac model here.
BAIR: OK.
HARRIS: So far, my understanding here -- and correct me where I'm incorrect -- the FDIC has taken over 653,000 mortgages, including more than 60,000, what we're calling troubled mortgages. Here is my question. Is it 40,000 of those troubled loans that now qualify for modifications?
BAIR: Right. Well, there's -- the 600,000-plus figure is the entire loan portfolio. Most of those continue to be performing. When we took over, there were about 60,000 delinquent loans, or loans already in bankruptcy and foreclosure. About 20,000 of those were already too far gone, they were too far along in the process, they had already been abandoned.
HARRIS: I see.
BAIR: The borrowers had given up. So we winnowed that down to 40,000.
Of those 40,000, we estimate we'll be able to get probably about 30,000 loan modification proposals out. We're up to 23,000 already. And we hope to be able to modify, ultimately finalize modifications, for about half of those.
HARRIS: OK. Yes. And very quickly, I just want -- and then I'm going to turn it over to Susan here.
What are the qualifications? For people who are watching now, how do you qualify for one of these modifications?
BAIR: Right. Well, it is -- unfortunately, the pooling and servicing agreements that control our abilities to modify loans as the servicer of these loans require that the loan be 60 days delinquent before we can modify it. Those are for the serviced loans, those that are owned by investors.
For those that IndyMac owns already, if default is reasonably foreseeable -- that is, if you're facing a resent, you're current now, but you're facing a reset that you know you can't make a payment on, then you should contact IndyMac servicing and we will see if we can put you into our loan modification protocol.
Generally, we use a debt to earning ratio of 38 percent. We can go all the way down to 31 percent to get the loan payment down. We'll use, as you indicated, an interest rate reduction first. We'll go all the way down to 3 percent for the first five years, and there's a life of loan cap of the prime rate, which is around 6 percent, a little less than 6 percent now.
If we can't get you into an affordable payment that way, we'll extend the amortization, the loan period, repayment period, to 40 years. And then we'll also do some principle forbearance if we can't get you to an affordable payment with those first two measures.
About 70 percent of the time we can get to an affordable payment with an interest rate reduction. And it's available to anyone. We are not re-underwriting and individually negotiating each loan.
HARRIS: Go you.
BAIR: So, your FICO, whatever, that really doesn't matter. We're going to verify your income, look at what your income is, and what you can afford, get your payment down to an affordable debt to income ratio. And then, if you can verify your income, you'll get the modification. HARRIS: Now, that's what we're calling the IndyMac model. And that's helpful as we look at perhaps extending this program across the country.
Susan, jump on in here.
SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: OK. Well, then, let's talk about that, Chairman Bair.
BAIR: OK.
LISOVICZ: You know, the mortgage business has changed so dramatically since our parents bought their homes.
BAIR: Yes, it has.
LISOVICZ: The old days, you go to a mortgage company, they give you the loan, think hold the loan. Now that loan is sold off to investors, and investors don't like the fact that these loans will be modified because they take losses, and they've already been hit with losses. And there have been already reports that some prominent investors are going to sue.
How do you make that work?
BAIR: Right. Well, we actually -- we looked at the authorities in our pooling and servicing agreements, and those are the contracts that govern what a servicer can do working for the investors, to service these loans.
Most of these pooling and servicing agreements give very wide flexibility to servicers to modify loans. The main restriction in our pooling and servicing agreement with IndyMac is that we can't do it before it becomes 60 days delinquent. But other than that, we have a fairly wide range of tools, including interest rate reductions, to modify the loan.
We briefed the investors on our loan modification protocol before we implemented it. It was already legally authorized. They have been supportive of it.
So I know unfortunately there are other investors out there threatening lawsuits. I think that is unfortunate and misguided. But the legal obligation of a servicer is clearly to maximize value for the servicing pool as a whole for all investors, not individual holders, which is some of the investors themselves, depending on where they are in the securitization arrangement, may have conflicting economic interests and may be impacted differently depending on whether you're doing an interest rate reduction or foreclosure.
But the servicer obligation is to the pool as a whole. So if the value of the modified loan exceeds foreclosure value, our view is it's the servicer's legal obligation to modify the loan. And if the investors are suggesting the servicer do something other than that, we don't think they're making an argument consistent with the law.
HARRIS: OK. Things just got really heavy.
BAIR: OK. Sorry. It's hard to break this down.
HARRIS: That's OK, Chairman Bair. Stay where you are.
BAIR: All right. Great.
HARRIS: Susan, stay where you are.
We're going to take a quick break.
When we come back, we will ask Chairman Bair if there is any real incentive for banks to dig out of this mess on their own, or are they all just looking and waiting for a bailout?
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
DAVID SEAMAN, IREPORTER: I think someone really has to step up to the plate and fix this. And not only that, I think people need to be held accountable. There are people who became extraordinarily rich off of these mortgage scams, giving people mortgages when they knew they weren't going to be able to make the payments. And the same for a lot of these credit card companies. I think someone should be held accountable. And I think we as citizens deserve an answer.
(END VIDEO CLIP)
HARRIS: CNN i-Reporters, Republicans and Democrats, sounding off on the state of the economy, their perspectives from their communities. Modifying mortgages a way to head off foreclosures.
Let us continue our conversation with FDIC chairman Sheila Bair. She is in Washington. And CNN's Susan Lisovicz at the New York Stock Exchange. And there you see a look at what we're calling the IndyMac model here to modifying the loans of homeowners in trouble.
Chairman Bair, how much money would it take to expand your program across the country and what are the chances of you getting that money from the -- let me not make it personal here -- from -- I was going to say from the Treasury secretary -- from the TARP. Let me take that approach.
BAIR: Well, we've estimated for a program that would last through 2009 with some loss sharing for loan modifications to provide an incentive to modify loans, providing some loss sharing if the loan once modified then redefaults, that this would cost about $24 billion to cover modifications through the end of 2009.
We think we can prevent about $1.5 million foreclosures with this program. These are the cost estimates that the FDIC economists have gone up with. They are fairly (INAUDIBLE) conservative estimates.
So yes, we would love to have some funding from the TARP funding, but we continue our discussions with a variety of policy makers about this. And we have a lot of interests in it. But I think it is a large amount of money in one sense, but a fairly modest sum compared to some of the other amounts we are spending.
And the thing about foreclosure prevention is you're tackling the problem at its roots, providing assistance to institutions. This is something that has to be done. But the institutions are suffering losses by and large because of distress in the mortgage markets. Trying to tackle the problem at the borrower level we think is fiscally responsible and smart to do.
HARRIS: Susan?
LISOVICZ: Chairman Bair, isn't the problem with this program the fact that it appeals to everyone, including people who would otherwise continue making their payments? These are tough times. And there is this very real issue of moral hazard. People might be inclined to game the system, to underreport their income. It might be easy to do given the fact that the U.S. economy has been in recession for the last year.
BAIR: Right. It's a good question. It's a fair question.
We actually think we have a fairly strong response to that. Because under this loan modification protocol, first of all, if you already have an affordable payment, you won't benefit from this. There is no principal write-down, so just if your loan is under water, that doesn't make any difference. You have to have an unaffordable mortgage and then we will reduce the payment down to an affordable debt-to-income ratio.
Also, well some might say, well, you just want to get the payment lowered. The other risk is if you purposely become delinquent to qualify for this program you will risk foreclosure because it still requires the net present value analysis be done between the value of the modified loan versus the value of the foreclosed property. And if the foreclosure value exceeds the value of the modified loan, the loan could go into foreclosure. So that would be a big risk for a homeowner to take to purposely become delinquent. So I think that would be ill advised under this program to try to game it in that way.
HARRIS: Let me see if I can tackle one other area --
BAIR: OK.
HARRIS: -- and it is the thought of banks and the general health of banks overall. Take a look at this graphic if you would. The second quarter of this year, 117 banks in trouble, 171 banks now in trouble in the third quarter.
A little straight talk from you here, Chairman Bair, until banks can get these bad mortgages off their books, more and more banks are going to struggle and more and more banks are going to fail. And the fact of the matter is that banks are wanting you, Secretary Paulson and Fed Chairman Ben Bernanke to make that bad paper go away, which means they're sitting back waiting for their cut of the bailout pie.
Where am I wrong in this?
BAIR: Well, I think it's a fair question.
First, I would like to point out that a lot of these high-risk mortgages are not held on bank balance sheets. They were -- as you indicated earlier -- investors, they were securitized, sold off into pieces to investors, a lot of whom are not banks. So a lot of the risk is held outside of the banking sector in terms of the insured depository institutions, which is our area of focus.
There are some troubled assets on the balance sheets of banks as well, obviously. And this is something that we've tried to deal with by encouraging high capital, aggressive provisioning against loan losses, the new capital injections under the TARP program, our liquidity guarantee, all designed to bolster bank balance sheets and get them in a position where they can continue lending to support strong economic growth and credit worthy activities.
So you're right, I think we are looking at ways where we can deal in a more systemic way with troubled assets on the balance sheets of financial institutions generally. That was one of the original thoughts behind TARP. That's gone in a different direction now. But there are still maybe some other things that we, working with the Fed and Treasury, can do to tackle this problem.
Clearly it's having a chilling effect on the willingness of private capital, private equity to come in and invest in financial institutions because of uncertainties about the degree of losses that may be suffered on some of these assets. But I would also circle back to where we started this conversation, to the extent that a lot of this -- most of it I believe is still housing driven. If we can stem the home price declines through more aggressive foreclosure prevention, I still think that that is a key central part of our efforts to tackle this broader problem.
HARRIS: So it leads to my final question, how well are you working with Secretary Paulson? Why doesn't he see the logic of this and --
Sorry, Susan, I know, I can see you over there groaning.
But really I want -- are you working well with the secretary.
BAIR: We work, yes. We do work very well together.
HARRIS: Are you?
BAIR: And unfortunately we've had different perspectives on this issue. But I think we continue to have a dialogue, we brief the transition teams, we continue our advocacy on the Hill and through the public media as well.
Thank you for again asking me on so I can talk about this program. So we're optimistic that the consensus will build to get something done because we're clearly very, very behind the curve on foreclosure prevention. HARRIS: Well, you're a friend of the program. We appreciate so much that you're willing to come on and tackle these difficult issues and speak directly to homeowners who are struggling right now.
Chairman Bair, thank you so much for your time.
Susan, awesome help as always. Thanks for helping me put this together. I appreciate it. Thank you both.
BAIR: Thank you, Tony. Great, bye-bye.
HARRIS: And remember, CNNMoney.com has some advice and answers. Check out our special report, "America's Money Crisis." That is at CNNMoney.com.
Former First Lady Barbara Bush being released from the hospital. An update on her recovery in just a moment.
(COMMERCIAL BREAK)
HARRIS: Showing solidarity with India. Senator John McCain visiting New Delhi in the wake of the deadly terrorist attacks. It is a quick stopover as he travels to Bangladesh. He plans to meet with Indian leaders to discuss the siege left almost 180 people dead last week in Mumbai.
India is blaming elements from Pakistan for that terrorist siege. Indian officials now renewing demands for Pakistan to hand over wanted militant leaders. Mumbai's police chief says the lone gunman captured in the attacks is cooperating well. He is said to have been trained by a Pakistani terrorist group blamed in a previous attack on the Indian Parliament. India confirms that U.S. intelligence warned of a possible attack just weeks before the massacre.
Thousands gather today to mourn the parents of that little boy and four other Jewish people killed in the Mumbai attack. The crowd included three former Israeli prime minister, Ehud Barack, who is now defense minister, Shimon Peres, Israel's current president, and Benjamin Netanyahu, leader of the Likud Party.
So many people came the funeral had to be held outside the headquarters of the Orthodox Jewish movement (ph). The sadness deepened by the conviction that the victims were targeted because of their religion. They're being buried on the Mount of Olives in Jerusalem.
The deaths are also being mourned by people all over the world. CNN's Josh Levs spoke with two rabbis about the repercussions of this attack.
JOSH LEVS, CNN CORRESPONDENT: Yes, you know, Tony, terrorism by definition is designed to scare people. And quite often that is the effect.
Now this attack on these particular victims for being Jewish could have the effect of scaring Jews anywhere. The rabbis I interviewed said they're mourning all the victims and telling their congregants not to let fear take over.
(BEGIN VIDEOTAPE)
ROBERT LEVINE, RABBI: We really have to arm our people with something else, and that is the values of justice. Terrorists hate stability. They hate attempts at reconciliation. So what -- the terrorists cannot allow India and Pakistan to be defeated in their efforts of reconciliation. Israel and the Palestinians have to continue to work together. And that's really the point, that we've seen this many times before. The Jewish people, in all humanity, have not been defeated by terrorism and we can't begin now.
LEVS: You know what the effort (ph) is. Rabbi Lew let me ask you, since this was a Chabad house that was attacked, do you feel less safe, especially if you were travelling overseas and you could be recognized as Jewish, based on appearance, or, if you're involved in Chabad activities? Do you personally worry more about your safety when you see this kind of terror?
RABBI YOSSI LEW, CHABAD OF GEORGIA: Well of course initially you feel somewhat worried and concerned. But ultimately we're very focused -- there are some 4,000 families, Chabad families, that would mean 8,000 people, across the globe in every single corner. And our vision and our goal is to bring light and humanitarian efforts for Jewish people and for all humanity. It's a global effort.
(END VIDEOTAPE)
LEVS: And the rabbi you're seeing there, Rabbi Lew, he actually provided over a baby naming this weekend for a newborn girl who was named after Rivka Holtzberg, who was the woman, the wife of the rabbi being mourned in Israel today.
And Tony, next hour we're going to be hearing from these rabbis on the role of God in a horror like this.
HARRIS: OK, Josh, appreciate it. See you next hour. Thanks.
Pakistan pledging to help in the aftermath of the attacks in India. Tonight on CNN's "LARRY KING LIVE" an exclusive interview with Pakistan's president, Zardari. That is tonight, 9:00 Eastern only on CNN.
(COMMERCIAL BREAK)
HARRIS: Does the music have to mean anything? Express yourself. Oh, i-Report. I got it.
Big happenings in outer space. Our i-Reporters captured every angle. Let's take a trip to the CNN.com's i-Report desk and check in.
And one of the things helping to run things down there at our all important i-Report operation -- where the heck has he been? Tyson Wheatley --
TYSON WHEATLEY, CNN.COM: Hey, Tony. HARRIS: Did you get paid while you were off? Are we paying you that well? Did you get that kind of a deal?
I guess you did, you're smiling. Good to have you back.
WHEATLEY: Thanks. It's good to be back. It's great to be back.
HARRIS: Well I know you've got some cool pictures from us. And we're going to talk about snow in a little bit. But let's talk about those cool pictures of the moon and the planets. This is great.
WHEATLEY: Yes, let's go ahead and look at the video right away. And I'll tell you what we're looking at here.
You've probably been reporting on this a lot today.
HARRIS: That is nice, yes.
WHEATLEY: The three brightest objects in the sky, the moon, Venus and Jupiter, came close enough together last night to form a bridge triangle we call it, astronomers call it. And sky watchers -- that was a rare treat for sky watchers all across the world really, and many of them caught it on camera and shared them with us on ireport.com.
This was taken by Mike Black out of Township, New Jersey. Mike is a 45-year-old science teacher and amateur astronomer. He caught these pics around 7:00 p.m. Eastern.
HARRIS: That's beautiful.
WHEATLEY: That's not the only place that we've got them. Let's go ahead and go to Ozark, Arkansas.
HARRIS: Nice.
Check out these pics from Brian Emfinger. And he lives in Ozark. And you know what? What I really love about this is that this is beautiful. Taken right at sunset.
HARRIS: You love the horizon line, there? Yes, that's great.
WHEATLEY: Yes. It's a really nice job. It was taken -- this was taken right on the Arkansas River. And Brian tell us that it was cloudy all day. But, then right at sunset the skies opened up and he was able to get some clear shots. So, pretty spectacular. Nice job.
Should we go to Idaho?
HARRIS: Yes. Let's do it. Let's do it. Yes.
WHEATLEY: Why not? Let's go to Idaho. Check out these great pics from Bob Young. And these are taken right outside his home in Boise. Now, what I love about this is, Bob posted these pics to his family blog and his niece in D.C. saw them and said, hey, you know what? You ought to share those with ireport.com. HARRIS: Oh, that's great.
WHEATLEY: Yes. So --
HARRIS: Hey, what do we that (INAUDIBLE) again? The triangle -- what is it, again? It's the --
WHEATLEY: A bridge triangle?
HARRIS: A bridge triangle. I'm going to talk to Jacqui in a couple of minutes and I want to sound really, really smart. You've got snow in the south from our i-Reporters, as well?
WHEATLEY: Yes. Some snow in the south. Some rain or snow. I think we're going to start in Alabama, with these first pictures. Yes.
So, this is the view outside Monica Fieldar's home in Mentone, Alabama. Now, you know, it's not that rare for snow in Mentone because it's up there in the northeastern mountain area of Alabama. But what was rare is that she says the snow was coming down -- this is a quote -- "in big potato chip-size flakes." So, they were only expecting snow flurries. So, they were kind of surprised when the snow actually stuck on the ground.
Now this snow. This --
HARRIS: Where's this?
WHEATLEY: This is in Canton, Georgia. This is really close to us.
HARRIS: Yes.
WHEATLEY: And this is snow that didn't stick to the ground. These are the snow flurries. But, you know what? It's such a rare treat when you get snow flurries that people just need to grab their video camera and go out on their deck and get shots like this.
HARRIS: Awesome. All right, your i-Reporters here are hard at work today. What's today's assignment there, Mr. Wheatley?
WHEATLEY: Well, today's assignment is --
HARRIS: Nice. That's good. Yes. Let's see how that works out. All right? Tyson, see you tomorrow! All right.
WHEATLEY: Take care, Tony. (INAUDIBLE). Back from vacation.
HARRIS: That'll be good. All right. Let's get a -- bye, Tyson.
Good bye.
(WEATHER REPORT) HARRIS: A run-off election today could put Democrats a step closer to a super majority in the Senate. A live report in the next hour of the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: Fighting tough economic times with new technology. The Salvation Army's red kettle goes high-tech. There's probably a web component to this. Ah yes, sure there is. Veronica De La Cruz joins us with details.
Good to see you, Veronica.
VERONICA DE LA CRUZ, CNN CORRESPONDENT: Nice to see you, Tony. Well, here's the deal. The organization says that donations at the kettle have been going down. While, tony, demand for help is going up. There's even been an shortage of kettle volunteers.
So I want to show you this article online, it's by Tom Patterson. It's at CNN.com. It highlights new methods used by the Salvation Army to solicit donations, Tony. For example, in some parts of the country the red kettle takes plastic.
Also you can donate using your cell phone. You can also use social media tools like Twitter and Facebook. For example, Tony, grab your cell phone, you're in Atlanta. You're in Atlanta, you can text the letters TSA, which stands for the Salvation Army, to 90999. The amount you choose to donate is then added to your cell phone bill at the end of the month. So, it's really easy.
You can also use the web to make a donation. Even easier. We're looking at thesalvationarmyusa.org. That also allows to you start your very own virtual kettle donation. You can attach a widget to your blog on your Facebook page. And check this out, Tony. The Salvation Army has also started using Twitter.
HARRIS: Oh, get out of here.
DE LA CRUZ: Yes. This page is twitter.com/salvationarmy. They have another one. It's at TSA red kettle. And, you know Tony, the red kettle campaign -- it started in San Francisco, back in 1891. So, the question is, you know, will the red kettle someday go extremely virtual? Or, disappear forever? And if this uses social media, is it a good idea?
We've been asking the question on our Facebook group today and Jeffrey Peters in New York, writes, I feel the use of social networks (INAUDIBLE) getting is a little less intrusive. I feel that if it's very easy to do, then more would be willing to donate small amounts to a cause.
Wouldn't you agree?
HARRIS: I think you've got make it as convenient at possible. Absolutely. DE LA CRUZ: Absolutely. So, we are asking you to join in on the discussion on Facebook. Veronica De La Cruz in the CNN NEWSROOM. You can also follow me on Twitter at Veronica DL Cruz.
Or, Tony at Twitter -- what's your twitter name? Your handle?
HARRIS: We've been there. I don't twitter. I don't -- it sounds odd.
All right, Veronica. We'll see you a little later in this hour.
