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President Obama Meeting With Nation's Mayors; Allen Stanford Tracked Down; Clinton's Last Stop in Asia Tour; Netanyahu Picked as Next Israeli PM; Hip Hop Doctor of Medicine; Biggest Decline in Dow History
Aired February 20, 2009 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: New jitters about the recession. Dow sinks to a six-year low. We're watching the markets all morning.
Plus real people, real shock. At the latest financial scandal.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I'm so just upset right now I can't even talk about it.
(END VIDEO CLIP)
COLLINS: He's accused of bilking investors out of billions. We go inside the world of Allen Stanford.
And getting out the word on health risks. Hip-hop doc is down with it.
It's Friday, February 20th. I'm Heidi Collins. You are in the CNN NEWSROOM.
Worries on Wall Street. At the bottom of the hour, the Dow Jones Industrial Average begins the day at its lowest point since October of 2002. Just since last week, the Dow has lost nearly 10 percent of its value.
And here's a truly ugly fact. In less than a year and a half, the Dow has plunged more than 47 percent from its record close.
Well, the nation's financial crisis from the city level now. This morning, President Barack Obama is meeting with dozens of mayors from around the country. One topic, getting their share of the stimulus package.
CNN White House correspondent Suzanne Malveaux is with us now this morning with a little bit closer look.
So what are these mayors going to be talking to the president about, Suzanne?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Heidi, we expect at about 90 minutes or so, the president is going to be addressing about 85 mayors from across the country in the east room. Essentially what he's going to be focusing on is transparency and accuracy.
How are they going to distribute this money? He's going to explain the process of how they can actually track how much money goes to each particular state, how that's divvied up in terms of the cities themselves, how they can lobby for it. And I have to tell you, Heidi, this is a group that was here at the White House just a couple of weeks ago. A good group of them...
COLLINS: I remember.
MALVEAUX: ... meeting with White House officials and, before, it was the tables were turned. It was the Obama administration that was asking them, please go to your congressional representatives and support this economic stimulus package. This is going to help out you and your city and the projects that you need.
And so I expect that the president is going to say thank you to some of those mayors and it will be fascinating to actually talk to some of the Republican mayors, Jerry Abramson from Louisville, Kentucky, obviously, the home state to Mitchell O'Connell, the minority leader.
Republicans who are very grateful for getting some of -- a piece of this pie, if you will. Their representatives very much against this economic stimulus package, so it will be interesting to talk to them. They are actually going to come to our stakeout cameras after this meeting, but a lot of these mayors saying, look, times are tough, times are hard, we want our piece of this economic stimulus.
COLLINS: Yes. Understood. It will be interesting to see what they say, for sure, we'll be watching for that a little bit later on today. But meanwhile, what are some of these mayors facing in particular? I mean how bad are these problems in some parts of the country?
MALVEAUX: Well, Heidi, we looked at the latest survey. When you take a look at some of these cities. Eight in 10 cities are in financial trouble. That's up from 64 percent just in the last six months or so. And cities are making some real sacrifices. 69 have instituted a hiring freezes or layoffs. You've got 42 percent that have been delaying the projects, many of the projects that they want to move forward and then 22 percent across the board cuts.
And one of the things that the president has said and will say today to these mayors is that these projects have to be ready in about right away, that they are shovel-ready, that they provide some sort of environmental or economic benefit in the next two years and that this deals with something that will benefit the private sector as well.
So there is criteria and these, I can't stress enough, that these mayors are very anxious to get their hands on some of this cash.
COLLINS: Yes. Very well understood. All right, Suzanne Malveaux, thanks for that.
Just a reminder now, as Suzanne was mentioning, next hour President Obama will talk with that group of mayors at the White House, scheduled for 10:30 Eastern and, of course, we're going to bring it to you live when it happens.
And next week, the president is talking to the nation about the economy and we built our prime time programming around that theme. The presidential address scheduled for 9:00 Eastern followed by Anderson Cooper and the best political team on television. Then at midnight, a special edition of "LARRY KING LIVE."
Governor Arnold Schwarzenegger is set to sign California's budget today. He's hailing the state's Senate and assembly for finally coming to an agreement to offset California's $42 billion budget shortfall. Schwarzenegger celebrated by taking down the sign by his office that counted out the days the legislature was working on the bill.
(BEGIN VIDEO CLIP)
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I know how difficult this was. Our budget crisis had acquired Democrats to compromise on the opposition to spending cuts, and it required the Republicans to compromise on the fierce opposition to tax increases. We also had -- there were protests from the powerful special interests that carried much of the weight right here in California.
(END VIDEO CLIP)
COLLINS: The state Senate finally reached agreement on the budget bill after 45.5 straight hours in session.
We also have an update for you now on Allen Stanford, the jet- setting Texan accused of multibillion dollar scam. Well, the FBI has tracked him the disgraced billionaire, and some of his former employees are talking to CNN.
CNN's Randi Kaye has that story.
(BEGIN VIDEOTAPE)
RANDI KAYE, CNN CORRESPONDENT (voice-over): After two days of mystery, Allen Stanford is finally found in Fredericksburg, Virginia in his girlfriend's car, and served with papers alleging a $9 billion fraud. His personal fortune was estimated at more than $2 billion.
So why did this Texas mogul allegedly swindle investors out of billions more?
The Securities and Exchange Commission accuses him of a scheme that promised, quote, "improbable and unsubstantiated high interest rates."
(on camera): The commission says Stanford's bank also fabricated historical return date to prey on investors. Stanford boasted a unique investment strategy which supposedly allowed for double-digit returns no matter the market.
(voice-over): Outside Stanford's U.S. headquarters in Houston, investors shock.
UNIDENTIFIED FEMALE: I'm so just upset right now I can't even talk about it.
KAYE: Federal investigators have frozen the company's assets and hauled away boxes of documents. Investigators around the world try to rescue their money from Antigua to Venezuela to Mexico. As one SEC official put it, "We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world."
These former Stanford employees left the company in 2007 because they didn't like what they say they saw going on.
(on camera): What was allegedly going on at Stanford that didn't seem right to you?
CHARLES RAWL, FMR. STANFORD EMPLOYEE: Our clients were not receiving the returns that the literature says they were receiving. That was disturbing.
KAYE: Are you surprised at all by the charges now against Stanford?
MARK TIDWELL, FMR. STANFORD EMPLOYEE: I'm shocked. I didn't realize the depth of the problems.
KAYE (voice-over): Both were interviewed by federal agents last year. So keeping them honest, who was in charge of keeping Stanford's books?
This tiny one-man firm in London. Just above a fish and chip shop is where Stanford's multibillion dollar portfolio was supposedly audited.
The 58-year-old cricket fanatic once landed a gold-plated helicopter at London's famed Lords Cricket ground, and unveiled a case full of $20 million in cash, as winnings for the Stanford Cricket Cup.
Stanford also liked to mix with politicians. This video on his company Web site shows him at last year's Democratic convention. He gave more than $200,000 to the Democrats' congressional campaign committee last year. Barack Obama got nearly $32,000. John McCain, more than $28,000. Both have now given the money to charities.
In fact, Stanford and his businesses made political donations of more than $2 million over the past decade. In September, Stanford told CNBC.
ALLEN STANFORD, DISGRACED BILLIONAIRE: So I have to say it is fun being a billionaire but...
UNIDENTIFIED MALE: I think a one-word answer...
STANFORD: But it's hard work.
KAYE: So is defending yourself in a multibillion dollar fraud scheme.
Randi Kaye, CNN, Houston.
(END VIDEOTAPE)
COLLINS: Now this could get ugly. Next hour, hundreds of former customers of Bernie Madoff are expected to show up at a federal bankruptcy court in New York. They want to find out if they'll get some of their money back from his alleged $50 billion scam. Many investors lost their life savings when they invested with the once well-respected financier.
Over the weather center now because we've got some new information from the National Weather Service on the tornadoes that hit Georgia this week. Our meteorologist Rob Marciano has that.
Boy, it was really, really ugly here.
ROB MARCIANO, CNN METEOROLOGIST: It was ugly but as far as the number of homes destroyed and the number of fatalities, I think, when we talk about big the storms were...
COLLINS: Really?
MARCIANO: Well, we got lucky. Pretty startling information coming from the National Weather Service. And we'll roll some video that came in from some of these damage.
This from Coweta County, which had an EF2 tornado. It was about a mile wide with 120-miles winds. That actually pretty small relatively speaking. As far as tornado was an EF3, that did have a fatality, had winds of 140 miles an hour, and the grand daddy was in Wilkes County.
That did not have any fatalities with an EF4 rating. 166-mile- an-hour winds, half mile wide, 16 miles long, it only destroyed or completely destroyed one home so considering the action we had across the southeast the last couple of days, although there was one fatalities, you saw some of the damage there, it could have been a whole heck of a lot worse.
(WEATHER REPORT)
COLLINS: Picking a new prime minister. Israeli's president has made his choice taking someone who's been there before but there's still one big hurdle to overcome. We are live in Jerusalem.
(COMMERCIAL BREAK)
COLLINS: High risk groups for heart disease need checkups. Hip- hop docs on the case.
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ANNOUNCER: This is CNN. The most trusted name in news. Now back to the CNN NEWSROOM. COLLINS: Secretary of State Hillary Clinton in China right now. She's expected to discuss North Korea's nuclear ambitions, but trade issues will probably play a larger role in talks with China's leaders.
Before getting there, Clinton talked about that with CNN foreign affairs correspondent Jill Dougherty.
(BEGIN VIDEO CLIP)
JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: This crisis is finally over. Could it turn out that China would emerge stronger than it is now, with the ability to pose a direct challenge to U.S. interests?
HILLARY CLINTON, SECRETARY OF STATE: You know, Jill, the way that I'm looking at China and anticipating our talks there over the next two days is that the rise of China is not in and of itself threatening to the United States. It's how China decides to act with whatever assets it has. But that's up to how we cooperate together.
(END VIDEO CLIP)
COLLINS: China is the last stop on Clinton's Asian tour. Earlier, she stopped in Japan, Indonesia and South Korea. This is Clinton's first trip overseas as secretary of state.
Israel may have a new man in charge. President Shimon Peres picked Benjamin Netanyahu as the next prime minister this morning, but it's not a done deal just yet.
CNN's Ben Wedeman joining us now live from Jerusalem.
So, Ben, we say new guy but we have certainly seen this man around before. How is this whole thing going to play out?
BEN WEDEMAN, CNN CORRESPONDENT: Well, basically, the prime -- this president of Israel, Shimon Peres, has given Benjamin Netanyahu six weeks to form a new government so he's going to have to work out with the various parties in Israel, a coalition. And that is not an easy task. The numbers are in his favor. That's why he was chosen to form a government.
But what he wants to do, what he said he wants to do is form a national unity government which would bring in the Kadima Party, the center right party led by Tzipi Livni, the current Israeli foreign minister. But she said she doesn't want to join such a government.
So he's either going to have convince her to change her mind or he may end up, Heidi, forming a coalition of right-wing, in some cases, far right-wing parties, to form a government which may spell trouble further down the line whether it comes to dealing, for instance, with the Palestinians. Heidi?
COLLINS: Right. What are the chances then, Ben, of getting Tzipi Livni on board? WEDEMAN: Well, they seem to be slim at the moment. But this is politics and he's got six weeks. One week is a long time in politics. Six weeks is a lifetime. So he's got a lot of time to try to get her to change her mind. But she sent out yesterday tens of thousands of text messages to members of her party saying quite flatly that she's not going to join a Likud-led government so he's going to have to do a lot of convincing to bring her on board. Heidi?
COLLINS: Yes, interesting. All right, Ben, we know you're on top of it. Keep us posted. Thank you.
Building the bomb. A U.N. nuclear watchdog group now says Iran has the capability. An Institute for Science and International Security report says Iran hasn't built a nuclear weapon yet but the scientists in Iran have enough low enriched uranium to build a single nuclear bomb. That report also says Iran has built new facilities now to enrich more uranium but they aren't being used yet.
A child confession. He says he killed his dad. You've seen the police interrogation tape. Now find out if the boy will serve time.
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COLLINS: Reaching out to people at risk. A doctor is using a nontraditional approach to encourage healthy habits.
Our senior medical correspondent Elizabeth Cohen has the story.
(BEGIN VIDEOTAPE)
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT (voice-over): He's known as the Hip Hop Doc. And Doc isn't just a nickname.
Dr. Ronnie Whitfield is a practicing medical doctor who uses hip hop music to educate young African-Americans about their risk of preventable conditions like heart disease and stroke.
Dr. Whitfield says traditional messages just weren't reaching minority communities and that is why he turned to music.
UNIDENTIFIED MALE: You can't get away from hip hop. Those messages do get to the young people and they deliver them to their parents. So I tell my heart disease, stroke, the same stuff my doctor tells me in the office.
COHEN: According to the CDC African-Americans have the highest rate of high blood pressure of all racial groups, putting them at risk for heart disease, stroke and congestive heart failure. But these risks aren't limited to black Americans.
UNIDENTIFIED MALE: Asian Americans will likely get hypertension and cholesterol problem when they come to our country. Native American may have more diabetes, but the Mexican American that come across the board is one of two have diabetes.
COHEN: Experts believe there are many reasons why so many minorities suffer from heart disease, high blood pressure and diabetes. Part of it may be genetic, but cardiologist Cornelius Flowers says another reason is that physicians don't always communicate very well with their minority patients.
UNIDENTIFIED MALE: You may have the best treatment in the world, you may have the best medication. You may have the best advice to your patient, but if your patient is not getting the message, if they're not understanding what you're talking about, if they're not getting it through their head, then it's no good.
COHEN: That's why the Hip Hop Doc is taking matters into his own hands.
UNIDENTIFIED MALE: Because whether we have to go to the barber shops, to the schools, you know, using hip hop music, using country music, whatever it takes to address that particular community, we have to find ways to get the messages to them.
(END VIDEOTAPE)
COLLINS: Stroke is no joke and heart disease, it comes with ease. Did I get it?
COHEN: You did that pretty well. That's impressive.
COLLINS: It took me the entire break to practice. Yes. So Elizabeth Cohen...
COHEN: Yes, high (INAUDIBLE).
COLLINS: ... joining us now to talk a little bit more about this. You have to wonder. I mean it's really -- it's a great idea to kind of reach people that you might not be able to reach with the information about your health. But talk to us about some of the ethnic differences here now when we're talking about the health of the heart.
COHEN: Right. In the story we talked about some genetic differences between people with different races and this is very interesting research that really in many ways has just started. What they're finding is that people of different ethnic groups react differently to different drugs because of their genes.
For example, African-Americans don't react the same to certain blood pressure drugs in the same way that white people do. But here's the problem. Most of the studies are on white men. So there is a general consensus...
COLLINS: What good does that do?
COHEN: Right. There's a general consensus that more minorities need to be included in this study.
COLLINS: OK. So that's -- is that coming or it's going to be changing a bit?
COHEN: It's been happening. It's definitely been happening more and more.
COLLINS: OK. So we'll follow-up on that later on.
COHEN: Great.
COLLINS: When the research is available.
COHEN: Sounds good. That's right.
COLLINS: All right, Elizabeth Cohen. Thank you.
COHEN: Thanks.
COLLINS: The more fast food restaurants near your home, apparently, the higher your chances of having a stroke. That is the conclusion of a new study out of the University of Michigan.
So what's to blame? The food or other factors within those neighborhoods?
CNN medical correspondent Elizabeth Cohen, going to be talking with us again next hour about the details of that fascinating research.
Also help is on the way for many overweight children. Several health groups and private insurance companies are launching a new initiative to get obese children more access to health care. Participating insurance companies will pay for at least four yearly visits to a dietitian and pediatrician. The doctors will advise the children and their parents on ways to slim down and maintain a healthy weight.
Ties to Washington. A popular billionaire accused of defrauding investors of billions of dollars. Did some of that money go into the pocket of politicians?
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ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.
(BEGIN VIDEO CLIP)
JOHN BECKER, CNN IREPORTER: Partake in Ponzi schemes and all these other rip-off schemes, we are have doomed. This is greed, greed, greed. This is how we got here and there is going to be no way out.
(END VIDEO CLIP)
COLLINS: One of our iReporters keeping it real, giving his view of our economic future. That was John Becker of Coral Springs, Florida.
So, John, thanks for that.
On Wall Street, investors have been heading for the exits. The Dow fell yesterday to a six-year low. Will the selling continue today?
Susan Lisovicz is at the New York Stock Exchange with details as we await just a few seconds away from that opening bell. Susan?
SUSAN LISOVICZ, CNN CORRESPONDENT: Hi. Well, there's applause but I'm sure it's not for the performance we saw on Wall Street yesterday. Unfortunately, we are expecting an encore, another sell- off at the open, Heidi.
And there's the opening bell.
The wave of selling hitting European and Asian markets as well but it all started here. The Dow Jones Industrial Average dropped below an important threshold yesterday closing below 7500 and we haven't seen a close that low since October of 2002, the bottom of the last bear market. The blue chip average has now given back nearly half its value since the record close about 14000 just a year and a half ago.
That's one of the biggest declines in the Dow's history. The Dow Jones Industrial Average dropped below an important threshold yesterday closing below 7500. We haven't seen them close that low since October of 2002. The bottom of the last bear market. The blue chip average has now given back nearly half its value since the record close above 14,000 just a year and a half ago. That's one of the biggest declines in the Dow's history. The only time it fell more significantly between 1929 and 1932 when the Dow lost nearly 90 percent of its value. Fortunately, no one is predicting we're going to see losses like that.
Just like yesterday, financial sector set to take it on the chin once again. Shares of Citigroup down 12 percent in the pre-market, down 12 percent in the first minute of trading at their lowest level in 18 years. Bank of America meanwhile down 11 percent. Investors worry the government's rescue efforts will fall short.
Also BFAs chief executive Ken Lewis receiving a subpoena from the New York State attorney general's office. Officials are investigating $3.5 billion in bonuses that were given to Merrill Lynch executives just days before the company completed its acquisition by BFA.
Quick corporate earnings, just want to mention. Home improvement retailer Lowe's posting a 60 percent drop in quarterly profit. Retailer J.C. Penny says its earnings falling 50 percent. And the big board, well, it shows that sentiment has not improved. The Dow right now down 103 points or 1.33 percent. The Nasdaq and the S&P 500 down one percent as well.
We're watching the S&P 500, too, Heidi, because that's a lot of mutual funds track that average with much broader average than the Dow and the low for that. The fair market low is 752. Right now, it's about 15 points away from that. So, clearly, the markets under pressure in the first few minutes of trading - Heidi.
COLLINS: Absolutely. All right, Susan, keep us posted. Thank you. LISOVICZ: You're welcome.
COLLINS: You know, another mirror on the economy is out this morning. Our Stephanie Elam is joining us now from New York with the latest report on consumer prices.
What do we have here, Stephanie? I'm kind of afraid to ask.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Well, Heidi, actually, it's a benchmark of inflation. That's why we keep our eyes on the consumer price index. It's a barometer of just how much you and I are spending for goods. In January, consumer prices rose .3 of a percent. That was in line with what economist were expecting. It marks the first time consumer prices have dropped since last July.
Now the year over year inflation rate, however, it was unchanged and that's the first time the reading hasn't posted a year over year increase since August of 1955. And if you take a look at core CPI which strips out volatile food and energy prices, it rose .2 percent in January. That's slightly more than expected. Year over year core prices up about 1.7 percent. That's the lowest 12-month rise in almost five years - Heidi.
COLLINS: So obviously, then, you have to start thinking about deflation because I mean if companies can't sell these products at the lower prices, then they just end up, I mean, you know, not making any money by doing that. They end up having to lay off more people and make less.
ELAM: Right. And that's the thing about deflation. It's basically the way you define it's a widespread drop in prices. So sellers cut their prices so low that they are not turning a profit. That can lead to job and production cut that further hurts the economy. Now, we have the small uptick in January which makes people think, well, prices are going up so should we be worried about inflation, but we don't know if this is just a flip or a trend. That's something that we're going to have to wait and see as we go through the next couple of months. But obviously people are keeping their eyes on Mr. Deflation and Mr. Inflation.
COLLINS: Yes, because it's hard to go to the stores and you see all these great deals on things, and you kind of get lost in that, and you forget the bigger picture there.
ELAM: Right. Obviously, we want prices to go down from the consumer's point of view, but overall if they go down too low, it doesn't help the economy.
COLLINS: Exactly. All right, Stephanie, thank you.
ELAM: Thanks.
COLLINS: Also on our economic radar, a subpoena for the CEO and chairman of Bank of America. The New York State Attorney General's office reportedly is looking into whether the bank misled investors about losses and bonuses at recently acquired Merrill Lynch. Prices at the pump are down. AAA saw them drop more than a penny yesterday. That's the fifth straight decline now. And Swedish carmaker Saab owned by General Motors says it will file for reorganization. It wants to become an independent car company.
Caring out massive fraud. That's the accusation against Texas billionaire Allen Stanford. FBI agent served him with papers yesterday. And now, there's new scrutiny into his dealings with powerful politicians. CNN's Brian Todd has more.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Congresswoman Nancy Pelosi...
BRIAN TODD, CNN CORRESPONDENT (voice-over): A warm embrace between Allen Stanford and House Speaker Nancy Pelosi at last summer's Democratic Convention. This video, posted on Stanford's company Web site, a public display of the efforts by the controversial financier to be a major player in Washington.
SHEILA KRUMHOLZ, CENTER FOR RESPONSIVE POLITICS: Stanford and his firm definitely had deep reach in Washington, giving $2.4 million back to 2000 and spending more than that on lobbying.
TODD: Sheila Krumholz's Center for Responsive Politics has complied lengthy documentation on money that Stanford, his employees or his political action committee gave to Washington's most powerful. Pelosi didn't get any money directly from Stanford. But the Democratic Congressional Campaign Committee, which Pelosi works with to get Democrats elected to Congress, got more than $200,000. Barack Obama got nearly $32,000 -- money since given to charity; John McCain, more than $28,000. Members of Congress who sit atop the major financial committees, like Senators Chris Dodd and Richard Shelby and Congressman Charles Rangel all got significant contributions from Allen Stanford or those around him. They all say they're giving the money to charity. But there are other questions.
KRUMHOLZ: Whether anyone in Congress or elsewhere stepped in to put in a good word for Stanford Financial Group with the SEC, to ensure that or to request that they be given a break and not be subjected to more aggressive regulation.
TODD: Krumholz doesn't have evidence of that. And aides to the president and all those members of Congress say they don't believe any appeals were made. But Krumholz believes the Securities and Exchange Commission has been slow to investigate Stanford. The SEC this week charged him with defrauding clients of more than $9 billion. But a former employee told the "Houston Chronicle" he saw problems a while ago.
CHARLES RAWL, FORMER STANFORD FINANCIAL EXECUTIVE: In mid-2006, I noticed that the performance of my clients was not tracking the published, advertised returns.
TODD (on camera): Contacted by CNN, S.E.C. officials deny that they were slow to investigate Allen Stanford. They say this is a very complicated case involving difficult matters of jurisdiction and it took a long time to gather enough evidence to bring a strong case. Our repeated efforts to reach Allen Stanford were unsuccessful.
Brian Todd, CNN, Washington.
(END VIDEOTAPE)
COLLINS: Laid off workers getting much needed help. Semi-trucks loaded with food and personal items pulled into the town of Wilmington, Ohio yesterday. The food is for the families of thousands of workers left jobless by a plant closure of air cargo carrier DHL. Many say they are barely getting by.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We're just going to try to hold it together as a family and go from there.
UNIDENTIFIED FEMALE: It's tough. It's just tough, because we're helping support not only our family but our children's families, too.
(END VIDEO CLIP)
COLLINS: City officials estimate 1 in 3 families in Wilmington is affected by the DHL shutdown.
The economic struggles of U.S. cities will be front and center, when 85 mayors meet at the White House with President Obama and Vice President Joe Biden next hour. In the noon hour, we're going to hear from one of them, Los Angeles Mayor Antonio Villaraigosa will join Tony Harris in the NEWSROOM, live, so watch for that.
President Obama goes abroad and basks in the glow of an adoring welcome. Is the U.S. image being restored to its former glory?
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COLLINS: Just about an hour from now, President Barack Obama will talk about his $787 billion economic recovery plan with mayors from across the country. He'll gather in the east room to hear from the president and vice president at 11:20 a.m. Mr. Obama will hold a closed door meeting in the Oval Office with his senior advisers, and at 12:45, White House Press Secretary Robert Gibbs will address reporters at his daily briefing.
President Obama made his first outside the U.S. borders to Canada yesterday. It was a quick visit but the president and Canada's Prime Minister Steven Harper talked about a lot of different issues, including trade fears and the struggling economy.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: I recognize the concerns of Canada, given how significant trade with the United States is to the Canadian economy. I provided Prime Minister Harper an assurance that I want to grow trade and not contract it. And I don't think that there was anything in the recovery package that is adverse to that goal. (END VIDEO CLIP)
COLLINS: Crowds of people turned out to get a glimpse of the president. The poll found two-thirds of Canadians wanted Mr. Obama elected.
Barack Obama, the candidate promised change. Part of the goal he said was restoring America's image abroad. Yesterday's warm reception in Canada shows he may have succeeded there. At least for now. The story from senior political analyst Bill Schneider.
(BEGIN VIDEOTAPE)
BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): In 2004, President Bush went to Canada and faced massive protests. This week, President Obama went to Canada and faced adoring crowds. The new president wants to transform the image of the United States in the world.
OBAMA: In Europe, the view that America is part of what has gone wrong in our world, rather than a force to help us make it right, has become all too common.
SCHNEIDER: Do Americans believe world leaders respect the president of the United States? Gallup asked that question last year, when George W. Bush was president. Only 24 percent of Americans said yes. Now, with Obama in office, two-thirds of Americans believe the president is respected by other world leaders.
But does the public think President Obama has changed the image of the country? Last year, 43 percent of Americans thought the United States rated favorably in the eyes of the world. That has not changed much. Americans and the rest of the world are waiting to see what kinds of policy changes President Obama will make. The biggest change so far? Closing the detention center in Guantanamo. More changes have been promised.
OBAMA: This is the moment we must help answer the call for a new dawn in the Middle East. This is the moment when we must come together to save this planet.
SCHNEIDER: There are some thorny problems ahead, like Afghanistan, where President Obama has announced an increase in the U.S. troop commitment.
When asked whether Canada should do the same, Canadians were opposed by nearly 2-1.
(END VIDEOTAPE)
COLLINS: For the record, President Obama did not ask Canada to keep its troops longer in Afghanistan. He is asking other allies, though, to deepen their commitment.
And next week, the president is talking to the nation about the economy and we built our prime time programming around that theme. The presidential address scheduled for 9:00 Eastern, followed by Anderson Cooper and the Best Political Team on Television. Then at midnight, a special edition of "LARRY KING LIVE."
An apology of sorts from the "New York Post" over a cartoon it published on Wednesday. It shows two police officers standing over the body of a chimpanzee they had just shot. Some people saw it as a racist portrayal of President Obama. On its Web site, the post states, quote, "This most certainly was not it its intent. To those who were offended by the image, we apologize."
Post editors say the cartoon was meant to mock what it called an ineptly written stimulus bill, and they add no apology is due to tractors who used the cartoon to continue lashing out at the paper.
COLLINS: George Bush's former press secretary speaking out about his time at the White House. Ari Fleischer tells CNN's "D.L. HUGHLEY," "The administration made mistakes about Iraq and that turned many Americans against President Bush."
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ARI FLEISCHER, FMR. WHITE HOUSE PRESS SECRETARY: We were wrong about weapons of mass destruction being in Iraq. If he had been right and we found the stock piles as bad as the war turned out to be, much worse than we all thought it would be, I think most Americans feels like, well, I don't like going to war but thank God we stopped Saddam from using those.
D.L. HUGHLEY, CNN HOST, D.L. HUGHLEY BREAKS THE NEWS: When you find out that we were wrong -- I don't know that I've ever heard anybody associating with the president say that. I just don't know. But when you found out they were wrong, how did that make you feel. You know that you have been part of that war?
FLEISCHER: You just scratch your head and say how can we be wrong? It wasn't just us who thought he had weapons of mass destruction. The Egyptians thought it. The French thought it. The Germans thought it. The United Nations thought it. Bill Clinton, CIA thought it. We all thought it. Saddam was the big liar here.
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COLLINS: You can catch the rest of D.L.'s candid conversation with Ari Fleischer this weekend. "D.L. HUGHLEY BREAKS THE NEWS." It airs Saturday at 10:00 p.m. Easter. Sunday at 11:00.
Armed and dangerous and on the run.
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UNIDENTIFIED MALE: Under no circumstances should anyone answer the doors tonight in southern Indiana, and I'm even going to say the local area because we have no idea where he is. Do not answer your door! Call the police immediately.
(END VIDEO CLIP) COLLINS: A manhunt under way for a man suspected of shooting police officers.
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ROB MARCIANO, AMS METEOROLOGIST: Hello, again. I'm Rob Marciano in the CNN severe weather center. Not as much severe weather today, but certainly cold and a fire risk for parts of Florida and Texas, and another storm coming down the north of the plains. That will be getting into Chicago over the weekend for a decent amount of snow. Just how much? We'll talk about it. Complete weather coming up when the CNN NEWSROOM with Heidi Collins comes right back.
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JOHN STEVENS, IREPORTER: I've been unemployed, go through a foreclosure. I don't have a lot of income coming in which isn't enable me to pay my mortgage and keep up with things. But besides that, I was so excited yesterday when President Barack Obama announced his foreclosure fix, the housing fix. It kind of took a weight off my shoulders. Today, I find out that since President Obama announced his housing fix program, that Citi Mortgage was my mortgage company is now barreling full-force to take me out of this house.
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COLLINS: Issue number one, the economy. Many of you extremely worried about your financial future, and some are putting those concerns to tape. That was iReporter John Stevens from Connecticut. To hear more iReports or submit your own, we always welcome them. Just logon to iReport.com.
A search is underway right now for two men suspected of shooting two Indiana police officers during a motel ambush. It all happened last night and police went to the motel to investigate suspicious activity. That's when police say the suspects started firing.
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DET. TODD HOLLIS, JEFFERSONVILLE POLICE: As they began their investigation and approached the room, someone from the room opened fire on the officers. Striking both Officer Brody and Corporal Lawhorn. From my understanding, Officer Brody was struck in the upper body, near or around the vest, by passing the area the vest protects. Corporal Lawhorn was struck in the right leg, both officers were able to get to their radios and report officer down.
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COLLINS: The shooting happened in a southern Indiana town of Clarksville near Louisville, Kentucky. The officers had surgery and are listed in critical condition this morning.
The Connecticut woman mauled by her friend's chimpanzee this week has been transferred to a Cleveland clinic. It's the same hospital where the nation's first face transplant was performed back in December. The chimp's owner is surprised the animal was so aggressive.
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SANDRA HEROLD, CHIMP OWNER: He has never gotten aggressive before.
UNIDENTIFIED FEMALE: But you felt that you could handle an animal like that.
HEROLD: Yes, well, I didn't take him in public. I mean, I knew enough to know that he was -- you know he was getting to be a big guy and I didn't need that publicity. He was just my kid.
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COLLINS: Some discrepancy about whether it has happened before, as well. And medical workers say injuries to Charla Nash's face and scalp were so extensive, she was unrecognizable.
Winter weather advisories in effect now for parts of the Midwest. Meteorologist Rob Marciano is here in the severe weather center.
Hey there, Rob.
(WEATHER REPORT)
COLLINS: A child's confession. A 9-year-old boy telling police about killing his father and another man now the case is resolved.
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COLLINS: Police are still investigating, but they have arrested two suspects in connection to a string of arson fires in Pennsylvania. Prosecutors say the first suspect was arraigned Thursday in connection with several fires. A second suspect is accused in only one of those fires. 23 have been set in and around coastal Pennsylvania since the beginning of the year. Coatesville is about 45 miles from Philadelphia.
A 9-year-old boy pleads guilty to one count of negligent homicide four months after he was accused of killing his dad and a second man. The plea agreement keeps the case from going to trial in the small town of St. John's, Arizona. Gary Tuchman explains.
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GARY TUCHMAN, CNN CORRESPONDENT (voice-over): It is a confession from a child.
UNIDENTIFIED FEMALE: How many times do you think you fired the gun?
UNIDENTIFIED MALE: I think twice. UNIDENTIFIED FEMALE: You think twice?
UNIDENTIFIED MALE: Twice.
UNIDENTIFIED FEMALE: Do you think it could have been more than twice?
UNIDENTIFIED MALE: No, I thought it was twice.
TUCHMAN : The 8-year-old boy, his identity hidden because of his age, is interrogated by two female police officers. Earlier, on November 5, his father and a border at their home were found shot to death. The crime stunned the rural town of St. Johns, Arizona.
UNIDENTIFIED FEMALE: You shot your dad twice?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED FEMALE: OK. And then how many times did that gun shoot (NAME DELETED)?
UNIDENTIFIED MALE: I think twice. Like my dad.
TUCHMAN: The boy says he killed his dad and the other man. But why? He tells the investigators they were in pain.
UNIDENTIFIED MALE: The reason I shot my dad because he was suffering, I think. He was suffering.
UNIDENTIFIED FEMALE: OK.
UNIDENTIFIED MALE: So I shot him. I didn't want him to suffer.
TUCHMAN: Police have refused to speculate as to a motive. Defense attorneys say the boy was interrogated without being read his rights and without a parent or lawyer present. But now nearly four months after the deadly incident, the boy now 9, agreed to plead guilty to negligent homicide.
JUDGE MICHAEL ROCO: Do you admit or deny?
UNIDENTIFIED MALE: Admit.
TUCHMAN: The deal spares him of having being put in a juvenile detention facility. As part of the agreement, he will be on probation until he is 18. He will also undergo regular mental evaluations. And without court approval, he can't attend a school that's not in a secure facility.
Gary Tuchman, CNN, Atlanta.
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COLLINS: Trying to dig out of a six-year hole. Will the Dow drop to another bottom? Today, we check out the market in just a minute.
