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President Obama and Prime Minister Gordon Brown Meet; Building Collapses in Cologne, Germany; The Money Players; Obama, Brown Speak to Press

Aired March 03, 2009 - 11:59   ET

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

TONY HARRIS, CNN ANCHOR: And hello again, everyone. I'm Tony Harris in the CNN NEWSROOM.

Here are the headlines form CNN for Tuesday, March 3rd.

The president and the prime minister. The British leader calls on Washington this hour in a search for a new global deal.

All the president's men. Three leading players in America's money crisis try to sell Congress on a budget and a recovery.

A gang of gunmen opens fire on a bus carrying a national cricket team. The ambush leads to death and a manhunt -- in the NEWSROOM.

The U.S. and Britain, longtime allies, looking for solution to a common crisis, the global economic meltdown. President Obama and British Prime Minister Gordon Brown meeting at the White House right now, and the economy is issue #1.

White House Correspondent Suzanne Malveaux joining us live.

And you know, Suzanne, the prime minister is worried about the pressure the president has been under to protect American jobs. And we know that protectionism is likely to be a hot topic at the G-20 summit next month.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Absolutely, Tony. One of the things that some world leaders have expressed some concern about is the economic stimulus package and whether or not it actually has protectionism, some provisions in it that would prohibit some trade. And now that is something that President Obama has said not to worry about necessarily, that there are trade pacts that are in place not only for NAFTA, when it comes to Canada and Mexico, but also for England and some other folks who are looking at that very closely.

We know that both of these economies, the American, as well as the British economy, suffering tremendously when you take a look at the credit markets, when you take a look at the conditions of the banks. So both of these leaders turning to each other to exchange ideas, also looking for some guidance, and to make sure that they are on the same page when it comes to the Global Economic Summit that is going to take place in April.

Now, it's very clear that President Obama has his own ideas about how to fix the economy, but he's also going to be turning to the prime minister, Gordon Brown, and he's going to be listening to some of his ideas as well. You know that it was Britain that really took the lead in recapitalizing some of their own failing banks. It was the United States, the Bush administration at the time, that followed Britain's lead.

Now we find both of the economies of Britain, as well as here, kind of in a state of shambles, a mess, if you will. Both of them trying to at least come up with some ideas and present a unified front in April when they deal with some of the other industrialized countries -- Tony.

HARRIS: All right. Our White House Correspondent Suzanne Malveaux for us.

Suzanne, thank you.

The British leader is banking on the U.S. president to help revive the economy and his own political capital.

Here's CNN's Kitty Pilgrim.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): British Prime Minister Gordon Brown wants the U.S. to spearhead a new-deal-style rescue package for the global economy. In his recent op-ed, he recalls U.S./British ties and the era of Winston Churchill using all the Obama buzz words calling for high growth, low carbon recovery, and applauding the American spirit of enterprise.

GORDON BROWN, BRITISH PRIME MINISTER: A global grand bargain is not now just necessary, but it is vitally urgent.

PILGRIM: The irony is not lost on many who study U.S./European relations. With a couple of trillion dollars of world market losses, the U.S. has gone from international pariah to potential savior. Nile Gardiner has studied European/U.S. relations for the conservative Heritage Foundation.

NILE GARDINER, HERITAGE FOUNDATION: In this case this is not going to benefit the United States at all. This is the European Union trying to dictate to America and the rest of the world how to solve the financial crisis.

PILGRIM: Financially Europe is in very tough shape. It's deeply divided with charges of protectionism among member states. With an unemployment rate in double digits in some countries, several banks across European have had to be nationalized. This weekend the EU rejected a bailout for Eastern Europe. This global financial consultant says there's no question.

NARIMAN BEHRAVESH, IHS GLOBAL INSIGHT: Europe could do a lot more. Europe could cut interest rates more. The European Central Bank could cut interest rates all the way down to zero essential like what the Fed has done. They could provide a lot more fiscal stimulus. They've only done it in a very, very small kind of timid way. PILGRIM: In the U.S., the financial stimulus plan over the next two years is 5.5 percent of GDP, but it's only 1.5 percent in the U.K. and the Eurozone.

Kitty Pilgrim, CNN.

(END VIDEOTAPE)

HARRIS: Want to give you a quick update on the story we reported last hour here in the CNN NEWSROOM as breaking news. Going to take you now to some pictures from n-tv in Cologne, Germany.

Wow. And it's about as dramatic as we thought it might be, just judging on the pictures, based on the pictures we saw from a newspaper Web site just moments ago.

But these are actual on-the-ground pictures now of this building collapse in Cologne, Germany. It is a building that houses the Cologne city archives.

As you can see here, it literally did collapse into a pile of rubbish. There were a number of people inside the building who managed to get out safely, if you can believe it, but we do understand that two construction workers are still reported missing.

And the actual force of the collapse brought down a couple of adjacent buildings as well. One witness described the scene this way: "Suddenly, there was rumbling as if a train were going past. Then the noise got louder and louder and we heard vibration. Then in seconds, the whole area was covered in a haze."

A spokesman for the Cologne Fire Department says that a number of the staff members and visitors again were able to get out shortly before the collapse, but that two construction workers were inside, and that they are still reported missing. They were working inside of the building. And actually, work was being carried out on a new subway line under the street at the time of the collapse.

And again, some devastating new pictures from n-tv of the scene. We will continue to update the story and bring you the latest images as we get them right here in the CNN NEWSROOM.

So the nitty-gritty begins. Treasury Secretary Timothy Geithner is headed to the Capitol this hour. In about 20 minutes, he will defend the tax proposals and President Obama's 2010 budget. Geithner answers questions for the tax-writing House Ways and Means Committee.

The president wants to increase taxes on the wealthiest Americans to help pay for his agenda and close the massive deficit. Even Democratic lawmakers have raised concerns over the budget's tax proposals.

Other money players fanned out at the Capitol today, armed with a hard-sell strategy. Is Congress buying?

CNN Senior Correspondent Allan Chernoff. I may have given you a nice little promotion there, Allan. But maybe not, given all the hard work that's going on there.

Allan is watching this story for us.

And the face of the money team, really, Allan, all the president's men, on the Hill today.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Yes, they are. And frankly, they're not mincing words.

The chairman of the Federal Reserve, Ben Bernanke, saying he's not really sure when the stimulus package is going to deliver for the economy, partly because, given the economic situation that we're in right now, so many people are going to be tucking any money they get, tucking it under their pillow, putting it in a savings account, not spending the money.

He's also saying infrastructure spending, he's not sure how quickly that's actually going to be put to work and how much impact it will have on the economy. So that's a little bit concerning here. He is talking about a Congressional Budget Office estimate that the stimulus package could help the economy by 1 percent to a little more than 3 percent next year.

Now, in terms of some other issues, the AIG bailout, he told Congress he is absolutely furious about it. Let's listen.

(BEGIN VIDEO CLIP)

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: I think if there's a single episode in this entire 18 months that has made me more angry, I can't think of one than AIG. AIG exploited a huge gap in the regulatory system. There was no oversight of the financial products division.

(END VIDEO CLIP)

CHERNOFF: And the chairman of the Federal Reserve is saying the government is bailing out AIG not to help the company, not to help the stockholders, but to save the economy, to help the economy, because you that's how big, how important AIG has become here. And that's the only reason the government, he says, is spending tens of billions of dollars to rescue AIG.

He's also talking about the budget and the deficit, $1.8 trillion. And both he and the budget director on Capitol Hill today saying, look, we don't like it, we wish it weren't so, but in these times, it's necessary for the government to spend -- Tony.

HARRIS: Some plain, straight talk from the Fed chairman. Boy, that's kind of nice to hear, a bit refreshing.

CHERNOFF: A little easier to understand than Mr. Alan Greenspan, right?

HARRIS: How about that? Yes.

CHERNOFF: You used to have to translate Greenspan speak.

HARRIS: We could use more of that.

Allan, appreciate it. Thank you.

Citi Mortgage is helping its out-of-work customers keep their homes. The bank will cut mortgage payments to an average $500 for three months. A customer's mortgage has to meet certain requirements. He or she has to be at least 60 days late, and the customer must show proof of recent unemployment benefits. Citigroup, the company's parent, has received $45 billion in taxpayer help.

OK. And once again, let's take you back to Cologne, Germany, again, just to show you the very latest pictures and bring you the latest information that we have.

Carlos Schlender is a Cologne reporter. He is on the scene.

And Carlos, if you would, would you talk us through the amazing pictures that we're seeing here of this collapse of this building in Cologne?

CARLOS SCHLENDER, RTL TELEVISION: Yes. The building that has collapsed is (INAUDIBLE) of Cologne. And at the moment, the police thought that maybe nine people could be trapped under the rubbish. It is not absolutely clear, because they have just a few hints from eyewitnesses that they had seen the people before and they couldn't see them after the building has crashed.

So the police are searching now for nine missing people.

HARRIS: So that is -- that's a significant update for us. We had reporting -- we had been reporting that two construction workers were reported missing, but the latest information now is that as many as nine people are reported missing?

SCHLENDER: Yes, that's true. That is new information we got a few minutes before.

The police are searching for nine people...

HARRIS: OK.

SCHLENDER: ... that might be under the rubbish. There were very few (ph) people inside of the building. There were construction workers and people who were working in that building. They were very lucky, because the house (ph) doesn't collapse very quickly.

So they heard a lot of noises before...

HARRIS: Right.

SCHLENDER: ... so the construction workers could tell them, leave the building. And most of the people -- it seems that most of the people could have left before.

HARRIS: Carlos, have you been able to talk to any witnesses? Have they been able to describe what they heard in the moments before the collapse?

SCHLENDER: No. All I heard was from the government here in Cologne.

HARRIS: OK.

SCHLENDER: They got information two weeks ago that there were cracks inside the building, and they looked for the cracks, but they saw the construction workers and specialists say, no, everything is safe and fine. But it seems that it was a big mistake.

HARRIS: Sure.

And Carlos, can you tell us anything about the construction work that was going on? We understand that work was going on on a new subway line under the street. Is that correct?

SCHLENDER: Yes, that's correct. Cologne is creating a new subway line, very close to that building. And we had a lot of problems with a church a few years ago. The church -- sorry, the church -- falling maybe, so construction workers had to fix it. It was two years ago, and maybe the construction work is the reason for the collapsed building.

HARRIS: And maybe just a couple of quick questions further.

Carlos, I understand that -- and maybe you can tell us if you can confirm this from your vantage point -- that not only did the archive building come down, but at least one other structure came down with that building.

SCHLENDER: Yes, it's true. There's two other buildings that are crashed down as well. (INAUDIBLE) two buildings crashed down.

So you could see from the street a lot of furniture standing in open rooms, and that is exactly the part where the nine people were missing. So the police and the fire brigades are searching not in the middle of the rubbish where the archives collapsed. They are searching more on the left side of the building for the nine missing people.

HARRIS: One more. We know that there are nine missing people, but were with there others who were able to get out who have injuries? Do we know if others were injured?

SCHLENDER: Yes. But I think the people that are injured are not serious injured. They have problems from the dust, and they are not so injured that they have to go to hospital or anything else.

HARRIS: And Carlos, generally speaking, how old would you say are the buildings in that general area, say, on that block?

SCHLENDER: Sorry. I can't say that. It was an old building, but I'm not sure how old it really was.

HARRIS: Sure.

Carlos Schlender reporting from the scene for RTL Television.

Carlos, appreciate it. Great information. Thank you.

Another terror attack to tell you about in Pakistan. This time, a cricket team is targeted. How vulnerable is this important U.S. ally?

(COMMERCIAL BREAK)

HARRIS: Reaching out to Syria. Secretary of State Hillary Clinton -- we'll get to that story in just a moment. Want to give you a quick update on the breaking news this hour.

Of course, it's in Cologne, Germany, and it is the collapse of this building, and at least two other buildings adjacent to it, alongside it. Carlos Schlender, a reporter from RTL Television, just moments ago telling us that a total of three buildings, at least three buildings, involved in this collapse. And nine people now reported missing. That ups the previous reporting that two construction works were missing.

Now a total of nine people missing. A number of people were able to get out of the building safely, some with minor injuries. They're being treated right now.

We will keep you posted on the latest information on this story.

And again, reaching out to Syria now. Secretary of State Hillary Clinton says the U.S. government will send two officials to Damascus to explore bilateral issues. It's been four years since the U.S. withdrew its ambassador to Syria. Clinton made the announcement today in Jerusalem. She is meeting there with Israeli political leaders.

Tomorrow, Clinton will visit with Palestinian leaders before heading on to Europe.

Terrorists strike again in Pakistan with deadly precision. It is all caught on tape.

If you look closely here, you will see gunmen firing at a bus. It was filled with a visiting sports team from Sri Lanka. A brazen attack happening in the city of Lahore.

Our Stan Grant is there and he joins us live.

And Stan, if you would, bring us the very latest on this attack.

STAN GRANT, CNN CORRESPONDENT: Yes, Tony, I am right at the spot where this attack took place some hours ago now. An attack in broad daylight, by masked gunmen, incredibly heavily armed, who moved out of the shadows and launched an attack on this Sri Lankan cricket team that were visiting Pakistan. The attack captured dramatically on video. Have a look at this.

(BEGIN VIDEOTAPE)

GRANT (voice-over): Dramatic video of gunmen attacking the Sri Lankan team bus in broad daylight. The cricketers on their way to the stadium for a match with Pakistan's team. The attackers armed with rifles, rocket launchers and grenades. A shootout in the streets, as Pakistan security move in to protect the players. A number of police left dead.

GOV. SALMAN TASEER, PUNJAB, PAKISTAN (through translator): This was a planned terrorist attack. The people had with them heavy weapons, grenades. The way they attacked wasn't normal terrorism.

CHIEF HAJI HABIBUR REHMAN, LAHORE POLICE (through translator): The police put up a lot of resistance, and I am proud of my policemen. They sacrificed a lot, and five were martyred, and four or five were injured.

GRANT: Sri Lanka players hit as well, a number wounded. Reports saying mostly minor injuries.

LUCIEN RAJAKARUNANAYA, SRI LANKAN GOVERNMENT SPOKESMAN: There are at least six players who are injured. Two of them have been treated at the hospital. And the others -- and all others are to be brought back.

GRANT: Witnesses and others traveling with the team describe what they saw.

"Suddenly in front of me was the SP van and two police warden (ph) vans, and the attackers targeted those vans first," says this bus driver. Officials in Sri Lanka quick to react. The match cancelled, the players will be flown home. The future of Pakistan cricket now in doubt. Other nations, Australia and India, already refuse to tour.

SANATH JAYASURLYA, FMR. SRI LANKAN CRICKET PLAYER: It's an unfortunate incident. And I think the only thing to be happy with, they are all safe. That's the good news when I spoke to Kumar (ph). So I think that is why we can be happy.

GRANT: This attack, proof again of Pakistan's struggle to contain terrorism. The government and military already battling militancy across the country.

(END VIDEOTAPE)

GRANT: Now, eight police officers were shot dead in this attack. The Sri Lankan players who were injured luckily have only suffered minor wounds.

Now, this, of course, comes as Pakistan deals with a rising militant threat right across the country. The Taliban encroaching ever ever closer to the capital, capturing more and more ground. Other separatist movements also bubbling up across the country as well, and political unrest on the streets.

And we know the United States is looking to Pakistan to do more to crack down on terrorism. Today showing that the militants can hit anywhere at any time -- Tony.

HARRIS: Stan Grant. What an amazing story.

Stan Grant in Lahore, Pakistan, for us.

Stan, appreciate it. Thank you.

The Dow opened below 7,000 today for the first time since 1997. Stocks shot up at the open, but an early rally sputtered.

Where are we now? Blue chips are off their all-time high by 52 percent. They're down almost 20 percent in 2009. One analyst says it's finally sinking in with investors, recovery will take years.

Our Christine Romans covers the financial meltdown for CNN and is co-host of "YOUR $$$$$" every weekend.

Christine, look, the Obama money men on Capitol Hill today. Let's start with Secretary Geithner.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Sure.

HARRIS: What would you like to hear from him today? What would markets like to hear from him today?

ROMANS: They want something that's going to restore a little bit of confidence. They want to hear that they've got the banking problem under control and that the worst of the banking problem is behind us. They maybe want to hear about -- more about private investors coming in here and running some funds to buy these toxic assets, and just do something to jump-start some interest in those.

We haven't seen a plan really yet that looks like it's going to work, Tony, but we keep coming back to these toxic assets, don't we?

HARRIS: Yes, we do.

ROMANS: They're not moving and they're dragging everybody down.

HARRIS: Well, what do you think of the news this morning that the administration is at least considering creating multiple investment funds to buy up these bad assets and to take them off the banks' books?

ROMANS: Yes, "The Wall Street Journal" had a great kind of analysis of this.

HARRIS: Yes.

ROMANS: It's generating a lot of talk and a lot of buzz on the street, you know. But what we've seen so far, Tony, are a lot of different plans and half plans. And we haven't gotten the combination right yet; have we?

I mean, the things that we've done to date have not worked to bring back confidence in the market, and patience is wearing thin. And these are two things that are impossible to quantify, patience and confidence, and it's what's really been lacking here.

What we know -- the Fed chief, for example, testifying today, talking about exports falling, manufacturing still very weak, the housing market -- the pace of declines that hasn't even slowed. We have a difficult economic situation here now, and that's working against all of the plans we've had to try to shore up the financial system and try to get money moving in the economy.

On the same day that we're talking about the economy weakening, we have, you know, Ford sales down 48 percent in the most recent months. You know, we know that auto sales are falling off a cliff. We know all of these different things.

So the market is telling us, frankly, that we're in it for -- we're in the soup for a while here.

HARRIS: We're in the soup.

ROMANS: And they don't see this confidence returning quite yet. And we're just kind of slogging along here.

But you know, Tony, since the financial bailout...

HARRIS: Yes.

ROMANS: ... you know, the TARP, the Dow is down 34 percent. Since the inauguration, the Dow is down 9 percent. Since the stimulus package was signed into law, the Dow is down 10 percent. Even as we've done each of these big steps, we just can't get the confidence back.

HARRIS: Can you make the argument that the street is voting no on the new administration and the new administration's approach so far?

ROMANS: I don't know if you can make that.

HARRIS: It's provocative. I just -- you know, I throw it out there.

ROMANS: I think what you can say is that the street is voting that they can look six months out. It can't see a turnaround yet. And that's what they're voting on.

And I think they're unnerved, frankly, about fourth quarter GDP, that economic growth number on Friday that was much worse than people thought. They are worried that the recession is worsening here, and that as a recession worsens, it unravels some of the progress we've made in the banking system.

I think people are just nervous. I think they really are. And there will be some who will tell you that that's a good contrarian indicator, that maybe when everyone throws in the towel, that means, ugh, now you know we really have gone through the worst of it because everyone is so freaked out. But those same people were saying that last fall, too.

I don't know. It's just nerve-racking, isn't it?

HARRIS: All right, Christine. Appreciate it. Thank you.

ROMANS: Sure.

HARRIS: It is nerve-racking.

We want to get back to the breaking news this hour, the building collapse in Cologne, Germany.

CNN producer Ben Brumfeld is on the scene for us, on the phone with us.

Ben, if you would, describe the scene.

BEN BRUMFELD, CNN PRODUCER: Hi, Tony.

I'm actually about four blocks away, because police have the area cordoned off in a very, very wide area, very wide range. But there are lots of police vehicles. I can see probably an estimate somewhere between 60 and 100 various police and rescue vehicles, a lot of people coming and going. And I have been able to talk to the police spokespeople to get information on the collapse.

HARRIS: What are you hearing?

BRUMFELD: What I'm hearing from the police is that at 1:45 local time, that they received calls that a building had collapsed. They went to the scene and saw that the city archive, which held a lot of historic documents, had collapsed forward into the street. And this is roughly about a six-story, six-or-seven-story building in a residential -- mixed residential/business area. And when the building collapsed, it pulled down parts of the buildings to the right and the left of the building as well.

Now...

HARRIS: No, go ahead, Ben.

BRUMFELD: Yes. Police are saying there are nine people missing. The nine people were all in the building to the left of the archives. Apparently, people -- or not apparently, but people in the building, working in the archive itself, felt that there was something wrong with the building, and they were with able to get out of the building before it collapsed.

HARRIS: And Ben, what have you learned about the construction work on a subway line under the building, under the street?

BRUMFELD: We're going to have a press conference in about five minutes with more details on that. I do know, having lived here for many years, that there has been a long-term subway project going through that area. No one has said yet whether or not that is the cause for certain.

HARRIS: Ben Brumfeld is a producer for CNN. And he is very close to the location of this collapse of a couple of buildings in Cologne, Germany.

We're going to continue to follow developments with this story and bring you the very latest as we get it for you.

You've been sending us a lot of your own financial questions. Gerri Willis and our help desk panel are getting you the answers, straight ahead in the NEWSROOM.

(COMMERCIAL BREAK)

BARACK OBAMA, PRESIDENT OF THE UNITD STATES: Are they? They're spread out?

All right. My understanding is, we're going to do four questions. And we'll just alternate. I'll start off with Jennifer Loven of A.P.

QUESTION: (OFF-MIKE)

OBAMA: You know, I think that the report that was in the New York Times didn't accurately characterize the letter. What we had was a very lengthy letter talking about a whole range of issues, from nuclear proliferation to how are we going to deal with a set of common security concerns along the Afghan border and -- and terrorism.

And what I said in the letter is the same thing that I've said publicly, which is that the missile defense that we have talked about deploying is directed towards not Russia, but Iran. That has always been the concern, that you had potentially a missile from Iran that threatened either the United States or Europe.

And what I said in the letter was that, obviously, to the extent that we are lessening Iran's commitment to nuclear weapons, then that reduces the pressure for -- or the need for a missile defense system. In no way does that in any -- does that diminish my commitment to making sure that Poland, the Czech Republic, and other NATO members are fully enjoying the partnership, the alliance, and U.S. support with respect to their security.

So the way it got characterized, I think, was as -- as some sort of quid pro quo. It was simply a statement of fact that I've made previously, which is, is that the missile defense program, to the extent that it is deployed, is designed to deal with not a Russian threat, but an Iranian threat.

QUESTION: (OFF-MIKE)

OBAMA: Oh, we -- well, we've had a good exchange between ourselves and the Russians. I've said that we need to reset or reboot the relationship there.

Russia needs to understand our unflagging commitment to the independence and security of countries like a Poland or a Czech Republic. On the other hand, we have areas of common concern, and I cited two examples, the issue of nuclear nonproliferation and the issue of terrorism. And at this point, I think we probably have some potential common concerns on the world economic front, as well.

So my hope is, is that we can have a constructive relationship where, based on common respect and mutual interest, we can move forward.

BROWN: Nick?

QUESTION: Nick Robertson, BBC News. Mr. President, it's often been said that you, unlike many of your predecessors, have not looked towards (ph) Europe, let alone Britain. Can you just respond to that comment?

And, also, the prime minister is talking to you about a global New Deal today. Will that actually help hard-pressed American consumers?

And if -- if may briefly put a question to the prime minister...

OBAMA: Well, first of all, the special relationship between the United States and Great Britain is one that is not just important to me; it's important to the American people.

And it is sustained by a common language, a common culture. Our legal system is directly inherited from the English system. Our system of government reflects many of these same values. So -- and, by the way, that's also where my mother's side of my family came from.

So I think this notion that somehow there is any lessening of that special relationship is misguided. You know, Great Britain is one of our closest, strongest allies. And there is a link, a bond there that will not break. And I think that's true not only on the economic front, but also on issues of common security.

And, you know, in our conversations here, we talked not only about the need to coordinate around economic policy, but also I expressed to the prime minister America's extraordinary gratitude for their support in our efforts in Afghanistan and the young men and women of Great Britain, who've made enormous sacrifices there.

The -- although there -- you know, there was a debate obviously around the issue of Iraq, nevertheless, whether you were for or against the war here in the United States, the recognition of Great Britain's friendship and standing tall with us during that period is something that will never be forgotten. And so rest assured that the relationship is not only special and strong, but will only get stronger as time goes on.

QUESTION: (OFF-MIKE)

BROWN: Let me -- let me just thank President Obama for his -- for his welcome, for his hospitality, for his leadership of this country, and the inspiration he's giving the world at this very difficult time.

And I've come here to renew our special relationship for new times. It's a partnership of purpose. It's a partnership of purpose that is born out of shared values. It's a partnership of purpose that is founded on a determination to rise to every challenge.

And I think it's a partnership of purpose that is driven forward now by the need for us all to work together in unity to deal with the world economic problems.

And I'm grateful for the conversations I'm having with President Obama about this and about other things and grateful, too, that Michelle and Sarah will be meeting later this afternoon. And I know they'll have an enjoyable time, as well.

OBAMA: Absolutely.

QUESTION: (OFF-MIKE) your chancellor has said overnight that it is our collective responsibility (OFF-MIKE) is that a form of apology from the government? Are you apologizing for the problems (OFF-MIKE)

BROWN: Well, there's got to be big regulatory change. We've -- we've just been talking, Barack and I, about the need for proper supervision of shadow banking systems, of areas where there was bank practices that were unacceptable, where remuneration policies got out of hand and weren't based on long-term success, but on short-term deals.

And these are the changes that we've already announced that we are going to make. So we've learned from what has happened over these last 10 years. Things have happened in every part of the world that we're having to learn about, as well.

And you've got an international financial system that we've now got to show can be brought to work in the public interest. So every country is learning, and every country is taking action. And what we're talking about today is how, by us taking action, Britain and America, we can help other countries join us in making for a more stable and effective financial system.

OBAMA: Kara (ph)?

QUESTION: Thank you, Mr. President. The stock market has fallen to lows not seen since 1997 (OFF-MIKE)

OBAMA: Well, let me say this. I'm absolutely confident that they will work, and I'm absolutely confident that credit's going to be flowing again, that businesses are going to start seeing opportunities for investment, they're going to start hiring again. People are going to be put back to work.

What I'm looking at is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing.

And, you know, the stock market is sort of like a tracking poll in politics. You know, it bobs up and down day to day. And if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong.

Now, having said that, the banking system has been dealt a heavy blow. It has to do with many of the things that Prime Minister Brown alluded to: lax regulation, massive over-leverage, huge systemic risks taken by unregulated institutions, as well as regulated institutions.

And so there are a lot of losses that are working their way through the system. And it's not surprising that the market is hurting as a consequence. You know, in fact -- you know, I think what we're seeing is that, as people absorb the depths of the problem that existed in the banking system, as well as the international ramifications of it, that, you know, there's going to be a natural reaction.

On the other hand, what you're now seeing is -- is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it. I think that consumer confidence, as they see the American Recovery and Reinvestment Act taking root, businesses are starting to see opportunities for investment and potential hiring.

We are going to start creating jobs again. One of the things that Prime Minister Brown and I talked about is, how can we coordinate so that all the G-20 countries, all the major countries around the world, in a coordinated fashion, are stimulating their economies? How can we make sure that there are a common set of principles, in terms how we're approaching banking, so that problems that exist in emerging markets like Hungary or the Ukraine don't have these enormous ripple effects that wash back onto our shores? And we're providing them with some help in a coordinated international fashion, as well.

All of those steps, I think, are going to slowly build confidence, but it's not going to happen overnight. And -- and my main message to the American people is to just recognize that we dug a very deep hole for ourselves. There were a lot of bad decisions that were made. We are cleaning up that mess.

It's going to be sort of full of fits and starts, in terms of getting the mess cleaned up, but it's going to get cleaned up. And we are going to recovery, and we are going to emerge more prosperous, more unified, and I think more protected from systemic risk having learned these lessons than we were before.

BROWN: I think President Obama's absolutely right. And I think the history books will record that what he has done in his first nearly 50 days of office has been momentous in setting the means by which we can see the economic recovery happening.

We've had a global banking failure, and it's happened in every part of the world. It's almost like a power cup (ph) that went right across the financial system, and we've got to rebuild that financial system. We've got to isolate the bad assets. We've got to underwrite the financial system so that loans can start again to businesses and -- and families. And we've got to get enough lending into the economy so that people -- enough credit so that people are able to go about their normal business again.

And that's why we're looking ahead to the G-20 in London in April, because a bad bank anywhere can affect good banks everywhere. So we've got to root out the problems that exist in other parts of the world, as well, set principles for the banking system for the future, and make sure that the banks subscribe to lending agreements where they actually increase the lending that is available to -- to citizens in every country.

OBAMA: One last one.

QUESTION: (OFF-MIKE) should all governments at this point acknowledge mistakes of policy and regulation (OFF-MIKE) would that be helpful or unhelpful in general? And can I just ask you, an awful lot of ink is used describing the individual relationships between prime ministers and presidents (OFF-MIKE) ask you describe how (OFF-MIKE) working with each other?

OBAMA: Well, I will say that this is my third meeting with -- with Prime Minister Brown, and I'd like to think that our relationship is terrific. And I'm sure he won't dispute me, in front of me, anyway.

The -- look, I think that the prime minister has taken the helm of the British economy at a very difficult time. As he noted, I've just come in recently. But I think that there are a set of shared values and shared assumptions between us, that we believe in the free market, we believe in a government that is not overbearing and allows entrepreneurs and businesses to thrive, but we also share a common belief that there have to be sufficient regulatory structures in place so that the market doesn't spin out of control.

I think, on the international front, we have a shared worldview that it is important for us to be true to our values and ideals, of rule of law, of a belief in human rights, a belief in -- in our democratic practices, but that we also have to be respectful around the world and to listen and not simply dictate, that, in this new world that we live in, the way to get things done is to build partnerships and alliances as opposed to acting unilaterally.

So I think both on the economy and both -- and on foreign policy, we've got a shared worldview that allows us to work together very effectively.

And he also has a wonderful family, as I do, so we can always talk about our -- our spectacular wives and our wonderful children.

With respect to the first part of your question, look, I think there is no doubt that, setting aside who's to blame, that in the past there have been some mistakes and lessons learned in terms of how we deal with the financial sector. Globalization can be an enormous force for good. And one of the things that we've talked about repeatedly is that countries in this crisis cannot start turning inward and try to erect protectionist barriers. We should encourage trade.

The fact that we have a global capital system allows money to flow to areas that previously couldn't get capital. That allows them to develop and to grow. That can grow the economy worldwide, increase trade, and that potentially benefits everybody.

But what is also true is, is that when you've got trillions of dollars that can now move at the speed of light, when you've got a whole series of unregulated pools of dollars outside of the banking system, but we still have a 1930s' regulatory system in place in most countries designed from the last great crisis, that we've got to update our institutions, our regulatory frameworks, so that the power of globalization is channeled for the benefit of ordinary men and women so that they have jobs, they can purchase a home, they can send their children to college, and prosper and thrive, and -- and that the benefits of globalization aren't just for a small handful of people who are not accountable.

And -- and that's the kind of transformation that we're, obviously, trying to bring about here in the United States, and I suspect that that's a view that Gordon shares.

GORDON BROWN, BRITISH PRIME MINISTER: I've enjoyed every conversation that we've had, both by the telephone and when we've met. I don't think I could ever compete with you at basketball. Perhaps tennis.

OBAMA: Tennis, I hear you've got a game.

BROWN: Yes, we could maybe have a -- have a shot.

OBAMA: We haven't tried it yet.

BROWN: I don't know. I think you'd be better, but there we are. As far as the common interests that we're pursuing, look, there is the possibility in the next few months of a global New Deal that will involve all the countries of the world in sorting out and cleaning up the banking system.

And there is the possibility of all the different countries of the world coming together to bring (ph) the expansion in the economy that is necessary to both restore confidence and to give people jobs and growth and prosperity for -- for the future.

And there is the possibility of the international institutions for the first time being reformed in such a way that they can do the job that people want them to do and deal with some of the problems that exist in the poorest countries of -- of the world.

And there's a chance, also, that the recovery that we're talking about can be a green recovery, a low-carbon recovery, where each country in different parts of the world can work on this together. So the opportunities are there. I've said to the president that almost every leader I meet wants the best possible relationship and the most highest degree of cooperation for the future. And so the challenges are momentous and global. The response of leaders around the world is to want to work together.

And I believe that we can make a contribution not just to each of our own economies, but make a contribution to the world economy, helping each economy, if we can actually work together. And that's why our talk about the G-20 is very important. We hope to make progress on April the 2nd.

And as far as regulation, I -- I want the regulatory system to be reformed to meet the needs of our times. When we made changes in 1997, we made changes for the times of 1997. The financial markets have moved global since then, and we need a global means of bringing people together so there's proper supervision of the system.

You don't want shadow banking systems. You don't want regulatory and tax havens. So we've got to act as a world together to deal with that. And that's one of the things we'll be talking about in April in London.

QUESTION: (OFF-MIKE) Pakistan terror attack (OFF-MIKE) in particular, Mr. President, have made it clear that (OFF-MIKE) see Afghanistan and Pakistan together. How do you think that the world community can support Pakistan?

OBAMA: Well, the details are still coming in, and so I don't want to be too specific.

(CROSSTALK)

OBAMA: Well, obviously, we're deeply concerned. But let me just make a general statement.

Both Great Britain and the United States share a deep interest in ensuring that neither Afghanistan nor Pakistan are safe havens for terrorist activity. And we have coordinated effectively in the past, but the truth is, is that the situation in Afghanistan has deteriorated. The safe havens for Al Qaida remain in the frontier regions of Pakistan.

And we are conducting currently a comprehensive review of our policies with respect to Afghanistan, with respect to Pakistan, our coordination with our NATO allies and other members of the international security forces that are there.

I will be making a series of announcements prior to the NATO summit that immediately follows the G-20 summit in terms of the direction that the United States would like to go. What I'm confident in is that our strongest partner in that effort, once again, will be the United Kingdom and -- and the prime minister sitting next to me.

OK? Thank you, guys.

QUESTION: Thank you.

TONY HARRIS, CNN ANCHOR: Susan Lisovicz joining me as we wrap the comments there. So much to talk about there between the president and British Prime Minister Gordon Brown.

And, Susan, paraphrasing the president for just a moment here, he said, the Dow, like a political -- it's like a political tracking poll. It's up, it's down and if you spend a lot of time worrying about that, then you'll probably get the long-term strategy wrong. Is he right?

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, I think the president is right and he's wrong. I think that he's right in the sense to obsess about day-to-day fluctuations in the stock market is a fool's game. There all sorts of reasons why the market goes up and down on a daily basis. Sometimes it's just had a big sell-off the day before. Sometimes it's because of what the administration is or isn't saying. There's so many reasons.

But long-term trends are undeniable. And the long-term trend here, as we all know, is that we're in a ferocious bear market. And since the president was elected election day, the Dow has lost 2,800 points.

Now some of this is beyond his control. We all know this. But when you talk to market pros, people who've been around a long time, they will stress, the market is intensely non-partisan. It is responding to what is being said or what is not being said.

I'll just give you an example of some of the things that I've been hearing today. This from Joe Battipaglia. He's a veteran market strategist. He says, you look at all of these spending plans and the fundamental question is, are there incentives to either taking more risk, as in making a loan, buying a stock, or consuming more, as consumers. The answer is no.

Other folks, a lot of folks say, it's the rhetoric of the president himself to instill confidence. The fact that AIG yesterday, a fourth cash infusion from the government when, in fact, it's already basically owned by the government. These are just some of the things that have been said and there's plenty more to go around.

HARRIS: Thanks, Susan.

LISOVICZ: That will be for our next chat, Tony.

HARRIS: Exactly, tomorrow. Thank you, Susan.

LISOVICZ: You're welcome.

HARRIS: Your questions about refinancing, credit cards and tax writeoffs. CNN's Gerri Willis is answering them with "The Help Desk."

(BEGIN VIDEOTAPE)

GERRI WILLIS, CNN PERSONAL FINANCE ADVISER: We want to get you answers to your financial questions. Let's go straight to "The Help Desk." Jack Otter with "Best Life," Hilary Kramer is a personal finance author, and Donna Rosato is a senior writer for "Money."

The first email comes from Greg. He asks, "I have a house with an ARM and 8.9 percent that I am struggling to get refinanced. My credit score is in the very low 600s. I'm getting turned down in my efforts to refinance to a conventional or FHA loan. I contacted my mortgage company about loan modifications and they told me that I can only apply if I miss one or two mortgage payments. I'm trying to correct my credit score, not damage it further. Any suggestions?" Hilary?

HILARY KRAMER, PERSONAL FINANCE AUTHOR: Absolutely. Get rid of that 8.9 percent adjustable rate mortgage no matter what. Go back to the bank, because every day the banks continue to receive pressure from our government to try to work around and modify these kinds of mortgages. Be adamant. Be diligent and get rid of 8.9 percent.

WILLIS: All right. That is not a good deal.

Second question comes from Dee, "My question is about paying certain types of credit card debt. If you have a delinquent credit card (i.e. the account is closed) and a current credit card, which should you pay first?" Jack.

JACK OTTER, "BEST LIFE" MAGAZINE: We've got two goals here. The first is you don't want that current credit card to go delinquent and damage your credit score even more. So make sure you're making at least the minimum payments there. Then I would direct the rest to just get rid of that delinquent credit card bill, get it off your record and then keep on paying the other down as quickly as you can.

WILLIS: From Amelia, "I finished my taxes and am ready to e- file. Will there be any new deductions or credits thanks to the stimulus package that I should wait for or should I go ahead and e- file?" Donna.

DONNA ROSATO, SENIOR WRITER, "MONEY" MAGAZINE: There are a number of new tax credits and deductions that you might be able to take. One, for example, is the first-time home buyers credit, that is good for first-time home buyers who have lived in - who will live in a home for three years. You can take $8,000 credit. If you already filed your taxes, you can file an amended return or can you even wait - or you can wait until 2009. That's good for 2008 and 2009.

There's also education tax credits and you've also got things if you buy a new car, you can write off the sales tax on a new car.

WILLIS: Jack, Donna, Hillary, thank you for that.

ROSATO: Thank you.

WILLIS: For more on the help desk, logon to cnn.com/help desk. And to see more answers to your questions, pick up the latest issue of "Money" magazine.

(END VIDEOTAPE)

HARRIS: So do you have questions about your 401(k) and stocks? Send them to CNN NEWSROOM at cnn.com. Kyra's team will be answering them throughout the afternoon.

As a matter of fact, CNN NEWSROOM continues right after this with Kyra Phillips.