Return to Transcripts main page
CNN Newsroom
Confidence-Builder-in-Chief; Insurance Companies Hoping to Get Government Bailout; Battle Lines on the Border; Color of Mortgage Money; The Number Behind Your Mortgage; Young People Who Rock; Man vs. Shark Death Struggle; All Aboard the Bullet; Name Your Price for Restaurant Fare
Aired March 13, 2009 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
T.J. HOLMES, CNN ANCHOR: Hello there, everybody. I'm T.J. Holmes sitting in the CNN NEWSROOM for my dear friend, Tony Harris today. Here are some headlines for you this Friday, the 13th. Don't worry, though. It's going to be a good day, folks.
President Obama, he's speaking out this hour. A new upbeat tone we're hearing from the president about the economy. The White House pushing the message that the recession can be defeated.
Also, we're stopping by "The Help Desk" with our helper there. Our personal finance editor, Gerri Willis. She gets the experts to answer your financial questions.
Also, civil rights groups taking two mortgage giants to court. NAACP claiming that the banks steered blacks to subprime loans. I'll be talking here live to the NAACP president in the NEWSROOM. Stay right here. Don't you go anywhere.
We will talk about this economy first. And there's confidence emanating from the White House about a recovery. One of President Obama's top money men expressing optimism that the economy will get better. Lawrence Summers is his name, you probably know it by now. He says, he believes the plans the administration has put in place are going to work, but be patient.
(BEGIN VIDEO CLIP)
LAWRENCE SUMMERS, DIRECTOR, NATIONAL ECONOMIC COUNCIL: They've embarked on what I believe is the boldest economic program to promote recovery and expansion in two generations. No one can know just when and how its positive effects will be fully felt. No one can predict with precision when this crisis will be resolved.
(END VIDEO CLIP)
HOLMES: Well, President Obama himself sounding more upbeat about the economy as well. He's meeting this hour with the chairman of the Economic Recovery Advisory Board. In a speech to business leaders yesterday, the president said the situation not as grim as it may seem.
(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I don't think things are ever as good as we say and they're never as bad as we say. And things two years ago were not as good as we thought because there were a lot of underlying weaknesses in the economy. And they're not as bad as we think they are now. We're going to restore confidence by - in a very systematic way, getting this financial system fixed.
(END VIDEO CLIP)
HOLMES: Well, White House Correspondent Suzanne Malveaux joins us again live from the White House.
And Suzanne, you could be guaranteed that every statement we heard about the economy, every speech we heard from the administration, you were going to hear at least one thing, and that is we inherited this recession. Now something else you're guaranteed to hear is the word "confidence." They're changing tone.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Yes, we could probably actually count the number of times that he says "confidence" or "confident."
We heard this from Larry Summers, his top economic adviser, just moments ago, where he said the one lesson they've learned from all of these financial crises is that they eventually end. And that is going to be the message from the president.
He's going to be talking about the fact that this is a unique situation, it came from a great deal of greed and too little fear, and that now's the time not to be afraid, but to take a chance here, to obviously invest. He has been talking about investing in the market, that this is a good time. Larry Summers, too, also saying that things are cheap, now's a good time for businesses to invest.
All of this part of a different tone, if you will, even a different language, to try to get people to believe in this economic stimulus plan.
HOLMES: Suzanne, what's the plan today? What's on the agenda?
MALVEAUX: Well, he's actually meeting with Paul Volcker. He's the former Fed chair. And this is part of an independent economic group. They're an advisory council, if you will, for the president.
He's going to be meeting with him, talking about how he believes the economic stimulus package is actually playing out, are we seeing more jobs, where are those jobs, that type of thing. And then we do spent to hear from the president in about 45 minutes or so to give us an outline, a briefing, from that meeting.
HOLMES: All right. We will be waiting and standing by for that.
Suzanne Malveaux for us from the White House.
Always a pleasure, ma'am. Thank you so much.
Meanwhile, China expressing concerns about the money it has loaned the U.S. No kidding.
China's leader says he has high expectations for President Obama's plans to tackle the financial crisis, but he's also calling on Washington to safeguard its assets. As you probably know by now, China is America's biggest foreign creditor.
Citigroup, meanwhile, may be turning a corner in the financial crisis, at least that's according to Chairman Richard Parsons. He reportedly says the bank does not need more government money, so Americans, put your wallets away. Parsons telling the Reuters news agency that Citi is one of the better capitalized banks in the world. That is after the company received three rounds of emergency funds from the government totaling $45 billion of your tax dollars.
Well, insurance companies, they're now holding out their hands in hopes of getting government bailout money.
Our Mary Snow looking at the financial strength of this industry.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): Hartford Financial Services touts on its Web site it's provided insurance since 1810.
NARRATOR: Obviously, it means coverage like life insurance and cars and homeowners. It can also mean a feeling, being confident about something, like your future.
SNOW: But investors recently haven't been so confident about the financial strength of the insurance company themselves. Hartford Financial has applied for government bailout money. So has Prudential Financial. Another big insurer, MetLife, declined comment.
The head of a trade group representing the life insurance industry says one dozen companies have applied.
FRANK KEATING, PRESIDENT & CEO, AMERICAN COUNCIL OF LIFE INSURERS: We need and we have a strong life insurance industry, but obviously a declining economy has an impact on everybody, including us.
SNOW: Those who follow the insurance industry say the portfolios of life insurance companies are taking a big hit.
OLIVIA MITCHELL, WHARTON SCHOOL OF BUSINESS: The life insurers are in fact holding some contaminated or toxic assets, and so that is something that's beginning to become evident only little by little.
SNOW: Unlike insurance giant AIG, which had a financial products unit at the core of its trouble, economists say life insurance companies face a different problem. They've invested in corporate bonds, bonds which have declined. And they're also feeling the effects of the sliding corporate real estate.
One economist says he doesn't envision companies defaulting immediately or going bankrupt, but... RICHARD PARKER, ECONOMIST, HARVARD KENNEDY SCHOOL: There might be a patch period of a couple of years, three to seven years out, where we could have real problems meeting all claim demands.
SNOW: Most insurers are regulated by states which have enties similar to the FDIC that protect policyholders in case of an insurer's collapse.
(on camera): As for the request for money, an administration official says the Treasury Department is closely looking at the situation but no decisions have been made.
Mary Snow, CNN, New York.
(END VIDEOTAPE)
HOLMES: Well, the NAACP accusing two banks of mortgage discrimination. The group filed a class action lawsuit today against HSBC, as well as Wells Fargo. It accuses the banks of forcing blacks into subprime mortgages while whites with the same qualifications got lower rates.
No response yet from Wells Fargo. HSBC, meanwhile, did issue this statement, saying, "HSBC does not comment on litigation. We stand by our lending practices." That was pretty much it.
We will talk live with the NAACP president, Ben Jealous. He's coming up with us here live at the bottom of the hour.
Well, the economy certainly the number one issue for just about everybody right now. And next week, we focus CNN's vast resources on the "ROAD TO RESCUE: A CNN SURVIVAL GUIDE." What do all the numbers really mean? There are a lot of numbers out there. Also, where are the jobs?
It's all next week for you, right here, beginning on Monday.
Well, you got a little time on your hands? Maybe some free time you could patrol the U.S. border? Even if you can't get out of the house, you still might be able to help out.
(COMMERCIAL BREAK)
HOLMES: All right. Information we just got in a couple of minutes ago is that Hillary Clinton will continue her travels. She will head south of the border. The secretary of state plans to travel to Mexico, March 25th and 26th. Not exactly clear on what will be on her agenda, but assume she'll be meeting with major officials down there, including the Mexican president, quite possibly. But her travels continue. She's already been to Asia and the Middle East, but now she will head south of the border to Mexico. Again, coming up at the end of this month.
Well, a drug cartel crime in Mexico taking a bite north of the border as well. A big West Coast travel agency says it won't direct students to Baja for spring break this year. Summer Winter Action Tours instead will recommend Palm Springs. Federal agents recently urged students to avoid Baja this spring break.
Well, the U.S. military may be sent to the border to guard against the drug violence, and our Jeanne Meserve, our homeland security correspondent, with the story.
(BEGIN VIDEOTAPE)
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): Thousands of National Guard were deployed to the border in 2006 to stop illegal immigrants. Now the governors of Texas and Arizona again want a strong Guard presence to stop the spillover of Mexican drug violence.
The president is weighing their request.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president enumerated again that our long-term challenges relating to many policy decisions around the border are not going to be solved in that long- term through the militarization of the border.
MESERVE: But at a Congressional hearing, officials said plans are being drawn up.
ROGER RUFE, DEPARTMENT OF HOMELAND SECURITY: We're working very closely in the planning process right now with our brethren in the National Guard and the Department of Defense to make sure we're ready when the time comes. We would exhaust all of the resources of the federal government short of DOD and National Guard troops before we would reach that tipping point.
MESERVE: Exactly what the tipping point is, officials won't say, though in an interview with regional newspapers, President Obama says a cartel murder of even one U.S. citizen would be unacceptable - enough of a concern to do something about it.
The Pentagon is already providing Mexico with up to five helicopters and a Marine surveillance vehicle. Satellite imagery provided by intelligence agencies is used to monitor the border, as our Customs and Border Protection unnamed aircraft.
(on camera): The Pentagon is in the process of determining if there are other ways of helping the Mexican government short of sending troops to the border. And Homeland Security Secretary Janet Napolitano is drawing up new proposals she will discuss with Mexican officials during meetings next month.
Jeanne Meserve, CNN, Washington.
(END VIDEO TAPE)
HOLMES: Well, there are some other ways to keep an eye on the border. How about cameras linked to your TV?
Nicole Lapin has just been deputized...
NICOLE LAPIN, CNN.COM CORRESPONDENT: Smile. HOLMES: She is - CNN.com. She is here to explain this one, virtual deputies.
Do we get a badge and everything?
LAPIN: You might, a virtual badge.
HOLMES: A virtual badge. All right.
LAPIN: That means it doesn't actually exist.
HOLMES: OK.
LAPIN: But you can be a deputy online. You do not have to require training to patrol the U.S./Mexico border. In fact, thanks to a $2 million grant from Texas, anyone can watch this grainy video along the international border of Texas.
Take a look at BlueServo.net. They have 15 different cameras set up, T.J. So let's choose one. OK?
Here's one that says it's a high crime area. Want to check this one out?
All right. This is a live look at a portion of the border. You see this? It's exactly what's happening there right now. These people are on the lookout for border violence, drug smuggling, illegal immigration. If you see anything suspicious, all you have to do is click on this, say "report suspicious activities," because it is run by the Texas Border Sheriff's Coalition. I know that shot was kind of lackluster. You didn't see a whole lot.
How about this? This was video of what somebody - can you see this?
This is a little bit of activity getting into a raft here. I know, we're trying. I promise.
Since this site launched in November, four arrests have taken place. There are still some critics of the program that say the program tempts extremists to become more familiar.
Here, they're getting into a raft. I promise, T.J. I know you're looking really hard there.
HOLMES: Yes.
LAPIN: They say it tempts extremists to get involved with border security, which is a job for the experts. But four arrests, as I've said, have happened. Two thousand pounds of marijuana have been seized thanks to this virtual patrol.
And yes, you get a virtual badge. I've got to tell you the story.
We talked to this woman, T.J., suburban New York. She has a little baby. When the baby takes a nap or when she can't sleep, she goes on there and patrols the border. I'm not joking. She says it's better than reruns of "Everybody Loves Raymond."
HOLMES: You know, and some people probably feel like they're empowered in such a way and they're helping out.
LAPIN: They are.
HOLMES: So there's that.
And we know you were trying. We could see. We could make it out. We'll take your word for it.
LAPIN: Look right here.
HOLMES: There's a raft.
LAPIN: Come on. Come on. I know it's sepia. But see right there? You see the activity and you just report it.
HOLMES: We take your word for it.
LAPIN: All right. Come on.
HOLMES: Nicole Lapin, always a pleasure.
LAPIN: You're welcome.
HOLMES: We appreciate you.
We're going to turn back to questions about your finances. Our Gerri Willis, she has the answers from our help desk.
(COMMERCIAL BREAK)
HOLMES: One of the biggest con men in the nation's history spending his first full day behind bars. Bernard Madoff says he is guilty and he is sorry, as well, for engineering a $65 billion Ponzi scheme - $65 billion.
What happened to that money? Who else was involved? Surely, he didn't work this thing alone. Investors have a lot of questions.
Randi Kaye has some answers.
(BEGIN VIDEOTAPE)
RANDI KAYE, CNN CORRESPONDENT (voice-over): The Madoff mea culpa, a guilty plea from the world's biggest swindler. But does that really mean case closed? Hardly. Just unanswered questions.
Where is the money? Attorney Ross Intelisano has 25 clients who he says lost $100 million with Madoff.
KAYE (on camera): Will investors get any of their money back? ROSS INTELISANO, ATTORNEY FOR MADOFF VICTIMS: The investors who directly invested with Madoff have what's called civic claims which can pay them back up to $500,000 per account. The people who got to Madoff through third party advisers or feeder funds do not have specific claims.
KAYE (voice-over): What about investors who made money? Will they have to give it back? Those so-called profits were actually other investors' money.
INTELISANO: What the trustee has indicated is that he will probably go after people for their false profits.
KAYE: Leaving one investor outside court bewildered.
UNIDENTIFIED MALE: Madoff investors paid in hundreds of millions, if not billions of dollars in income taxes on phantom income that never existed.
KAYE: Will investors get back those taxes paid?
UNIDENTIFIED MALE: They may have been borrowed from now seeking a refund of those taxes because it's outside the three-year window.
KAYE: The three-year window for claiming refunds. What about that Chase Manhattan bank account Madoff says he used to pay investors?
INTELISANO: If his Chase account was the account in which the fraud took place, they're going to follow that money.
KAYE (on camera): Is it possible that Bernard Madoff acted alone here?
INTELISANO: No, it's impossible. Bernie's 70 years old. He wasn't in his office just pumping out statements by himself. He clearly had an army of employees who were creating fake monthly statements, fake confirmations on trades.
KAYE: The question is, who are those people and where are those people? Court papers say Madoff hired employees with little or no experience to generate fraudulent documents, including client account statements and trade confirmations. And what about Madoff's family? Where they involved?
His sons were both executives for the firm but say they knew nothing about the fraud.
(voice-over): So much we still don't know, except how those swindled by Madoff feel about him now.
BENNETT GOLDWORTH, MADOFF VICTIM: He's a sick man.
KAYE: Randi Kaye, CNN, New York.
(END VIDEOTAPE) HOLMES: All right. With me now, Abbie Boudreau, CNN Special Investigations Unit, who's been all over this story.
And a lot of interest now. I mean, that part of it, a lot of people relieved he's in jail, but a lot of questions here about who else dropped the ball here.
ABBIE BOUDREAU, CNN CORRESPONDENT: Right.
HOLMES: You've been talking with folks who are close to the SEC and close to this investigation. You are learning some pretty interesting stuff now.
BOUDREAU: Well, we know yesterday that Madoff did try - he told members in the court and everybody that was in the court, listen, I did try to mislead people in the SEC, the examiners and the regulators. But the people I just talked to, government sources very close to the investigation, people who are investigating members of the SEC at this point, they say it doesn't matter that Madoff tried to mislead the examiners of the SEC. They should have been able to figure out that he was lying.
I mean, he was giving bogus information from the very beginning - false documents, claim forms and things like that. Simple phone calls, were they made? Those are the kinds of things that now the SEC says they're really zoning in on, they're focusing in like laser focus on the incompetency of these regulators.
HOLMES: But like you said, something as simple as picking up the phone and placing a phone call? They should have been able to figure some of this stuff out?
BOUDREAU: Well, you know, just because they could have easily have asked simple questions. They said it would not have been an overly complicated thing to do, to just follow up on these very, very easy things. Make a call.
HOLMES: All right. And a lot of people are guessing and assuming that, how in the world is he the only one who is in on this?
BOUDREAU: Right.
HOLMES: How could you perpetrate this kind of a fraud?
So what's going to happen now. A lot of people are going to focus on his family members, people that close to him. How could they not know?
BOUDREAU: Well, yes, I have no idea. But I do know that the government sources that I have close to the investigation say that his niece Shana and her husband, Eric Swanson - her husband Eric Swanson used to be a former SEC regulator during the same period of time that Madoff's operations were examined. So they are going to look at those two family members and just ask them the obvious questions that you would think that anybody would ask them, of course. As far as the sons and other people, I have been told that they are not going to necessarily be part of this particular investigation. Remember, there's lots of investigations out there. But this particular one into the SEC and how they handle everything, not so much, because it was Bernard Madoff who handled and interacted with the SEC regulators, for the most part.
HOLMES: OK. And another group that may be worth looking into, all these clients that went to Bernard Madoff, some of them were kind of pushed that way or maybe advised to go that way by their financial advisors. What about these guys?
BOUDREAU: Well, now we're learning that more of these financial advisers, the big question is, should they have been doing their due diligence? Of course, everyone's asking that question all along, but right now, now that we know how this fraud actually took place, and after hearing Madoff in court yesterday, and what he actually did, and how he says this is how it happened, now the focus is on these financial advisors who took the commissions, but did they do their due diligence?
HOLMES: Maybe they're just trying to line their pockets as well. Maybe, but still, everybody looking into it. A lot more looking into it.
You know, he's in jail. It seems like case closed, but it's not. The case still wide open, and just opening in some ways.
BOUDREAU: Absolutely.
HOLMES: Abbie Boudreau, CNN Special Investigations Unit, all over this thing.
Thank you so much.
BOUDREAU: Thanks.
HOLMES: Well, if your pockets feel a little bit emptier these days, there's really a good reason for that. The Federal Reserve says American households lost $11 trillion in wealth in 2008. That's an 18 percent decline.
About half of the loss came in the last quarter of the year. The Fed says most of the decline can be linked to the falling stock and real estate values. Certainly not breaking news there.
Well, how to fix the unemployment crisis, that's the focus of this hour's "90-Second Prescription."
We asked a top economist to give us their plans in 90 seconds or less.
(BEGIN VIDEO CLIP)
LAURENCE KOTLIKOFF, BOSTON UNIVERSITY: My solution to the job crisis is to first of all, continue with the president's stimulus bill, which is putting out a lot of money for direct public works. That's going to directly employ a lot of people.
And then in addition, we need to give people better incentives to work and to be employed. And here I would try and lower marginal tax rates. But I want to do this in a way that raises total tax revenue.
The idea here is to have a major tax reform that would lower rates, marginal rates, but really raise average rates, get more revenue in general. And the fair tax is actually that proposal. The idea is to have a single federal retail sales tax with a monthly payment to people so that poor people would have enough money to cover this tax. So we're talking about a very highly progressive, but very low marginal tax rate system.
(END VIDEO CLIP)
HOLMES: All right. It's going to be time for us to dial up Gerri Willis' help desk. CNN's personal finance editor and her guests answering your questions about your mortgage and savings.
(BEGIN VIDEOTAPE)
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Time to get you answers to your financial questions. Let's get straight to "The Help Desk."
Greg McBride is a senior analyst with Bankrate. Sonia Alleyne is career editor with "Black Enterprise" magazine. And Dani Babb is the author of "Accidental Landlord."
Let's go right to that first question. Cheryl asks, "I am retired and have been in my house for 10 years paying 7.5 percent interest rate on my mortgage. With mortgage rates dropping, should I refinance for a lower interest rate?
Dani?
DANIELLE BABB, AUTHOR, "ACCIDENTAL LANDLORD": Oh, heck, yes, you can get this under five percent. Under $417,000 balance, go for it.
WILLIS: Yes. Great idea, Danny.
GREG MCBRIDE, SENIOR ANALYST, BANKRATE.COM: Yes, go for a 15- year loan, too. Because, she cannot only keep her payments about the same, she can save herself years of mortgage payments.
BABB: Or pay twice a month.
WILLIS: That's an excellent idea. Go for the shorter-term loan. Joann asks, "Can you tell me the safe website to use to search for part-time work or work from home?"
Sonia, this is a trick question.
SONIA ALLEYNE, CAREER EDITOR, "BLACK ENTERPRISE" MAGAZINE: Yes, cause I'm reluctant to actually give you the name of a website, but there are opportunities online, particularly with medical billing, medical transcriptions, the census. And Danny just told me, online professors are actually growing, an area that's growing. So do your research. You can go online and find these places, but you have to do extreme due diligence and be prepared to do a lot of homework.
WILLIS: Because this is a big place where the scammers are.
ALLEYNE: There are scams, and there are opportunities. So you have to be really careful. Check with the Better Business Bureau.
WILLIS: Good idea.
OK, Tom asks, "My company just announced they are suspending my 401(k) contribution. Because of this and the current economic situation, should I stop contributing to my 401(k)? I've only been at it for two years and I have about $9,000."
Greg, I get this question maybe twice a week.
MCBRIDE: You want to maintain the habit of retirement savings, but without that employer match, the 401(k) may not be the best option. Instead, look at a Roth IRA. And if you have a high credit card interest rate debt, be sure to pay that off as well.
WILLIS: And the Roth IRA, again, you might have more choices out there really to choose from, right, Greg?
MCBRIDE: More choices. And the benefit is you can take the money out tax free in retirement.
WILLIS: All right.
OK, guys, great answers. Great questions. "The Help Desk" is all about getting you answers. Send me an e-mail to gerri@CNN.com, or logon to CNN.com/help desk to see more of our financial solutions.
And "The Help Desk," it is everywhere. Make sure to check out the latest issue of "Money" magazine on newsstands now.
(END VIDEOTAPE)
HOLMES: Well, the NAACP accusing two major banks of treating minorities unfairly when it comes to home mortgages. I'll ask the head of the organization exactly what they've been seeing.
(COMMERCIAL BREAK)
HOLMES: All right. Let's take a look at the numbers here. On this Friday the 13th. All right. Forty-two points. We're down. We've got a chance still to rally here. Hoping this could be the fourth straight day and have an up week here. A bit of a rally this week we've seen so far. The Nasdaq down 13, I'm told, on this Friday the 13th.
Well now to the housing crisis and charges of mortgage discrimination. The NAACP today filed suit against Wells Fargo and HSBC accusing the banks of steering blacks into subprime mortgages while whites with the same qualifications got lower rates. The NAACP's president, Ben Jealous, joins us now live from Washington.
Kind sir, we appreciate you being here.
Would you certainly, no doubt, qualify this as institutionalized racism that you're seeing, at least from these two banks?
BENJAMIN TODD JEALOUS, PRESIDENT & CEO, NAACP: That's right. These and about 12 others.
HOLMES: And about 12 others. Now will - have you taken action against those others just yet or are they on your list, if you will?
JEALOUS: Yes. Yes, no, no, no. No, no. What we're doing right now is we're - is these two are being brought into the suit that's facing 12 others.
HOLMES: All right. Now do you - I guess, what do you see - are you doing this to try to get their books opened up, to get a closer examination of what they're doing? Or do you have enough evidence that you think already that can hold up in court to find these guilty, if you will, of what you're saying they've been doing?
JEALOUS: You know, we have targeted these banks because we have gone through what we can get our hands on and it seems like there's a real problem here. With that said, what we want is transparency. You know, we want to see the books. We are not seeking damages. We just want them to fix the problem.
HOLMES: How widespread do you think - like you said, this is going to be up to a dozen, now, banks that you have this suit against. So I guess how widespread - you only have 12 banks here - but do you think this is a system-wide problem?
JEALOUS: This is certainly a very common problem. And you've got to remember that the banking industry has been very consolidated. So when you're talking about going from 12 banks or 14 banks, that's actually - and you're talking about big banks like Wells Fargo, that's a big chunk of the industry.
And what we're seeing is time and time again, black people with assets - you know, so they already owned their home, they had good credit, they had a job, they had the same qualifications as a white counterpart. And yet, when they walked out of the bank, they were being charged more. If it was a conventional loan, it was 1.3 percent more. If they had been pushed into a subprime loan, it was 2.75 percent more. And we all know, you know, the difference between paying 6 percent and 7.85 percent is huge. That often decides whether or not you can hold on to your house.
HOLMES: To your house or not.
And do you all believe that there are actual policies in place that people and people who are out there, these mortgage brokers, are actually saying and actually pushing a policy against blacks and against minorities? Or do you just think there are just some leftover attitudes that continue to permeate this whole system? JEALOUS: You know, it's probably the second option. You know, the reality is - this is a great country. We've made a lot of changes. But there's some old patterns and problems that continue to persist. You know, some of this just has to do with where the banks are and where the banks aren't. And how disempowered people feel going across town to go to the bank or how, you know, the fact that walking down their street, they're going to be roped in by some broker.
It also has to do with just the art of the deal. You know, you see similar things often in the car industry where people just look at a black consumer and they say, you know what, I think this person just feels less empowered and I'm going to be able to roll them better than I could roll a white person. I mean it's - you know.
HOLMES: So it sounds there that maybe there needs to be a change in policy. Maybe some different things put in place. But how big of an issue here as well is just you need to find a way here to change attitudes? That's as much of what this lawsuit is about as changing policies.
JEALOUS: That's exactly right. I mean, you know, what this is about is, we need to let in the sunshine. We need to be able to see what's going on. We need to be able to sit down with the banks and say, hey, you know, the stats don't lie. These people had the same qualifications. They should have gotten the same rates. So let's put in some sort of warning system so that this doesn't happen again and let's just move beyond this bad chapter.
You know, this sort of discrimination, at the end of the day, totals out to the biggest strip mining of working people in this country that we've seen in the 233 years, you know, since the U.S. has been here. It's a very big deal.
HOLMES: All right. Ben Jealous, again, head of the NAACP.
Sir, we appreciate you taking the time. Appreciate you being here. Going to see you down the road real soon. And again, congratulations. I know the first few months have been busy for you, been hectic for you, but by all accounts, you're headed in the right direction, maybe. So we'll continue to see you down the road.
JEALOUS: Of course. Thank you, T.J. Thank you.
HOLMES: All right.
And we have contacted the banks in question here for their reaction to the lawsuits and the allegations by the NAACP. No response we've gotten just yet from Wells Fargo. We did get a little something here from HSBC. A brief statement saying, "HSBC does not comment on litigation. We stand by our lending practices." So stay tuned.
Well, your credit score plays a role in whether you get a mortgage and the interest rate you will pay. Gerri Willis, our personal finance editor, here once again. WILLIS: Hi there.
HOLMES: So we hear this all the time, but still sometimes it's worth repeating and explain to people exactly how this works.
WILLIS: Yes. Right. OK. So, you know, to start with, the relationship between your credit score and the interest rate you pay. That's what we're talking about here.
Simply put, the higher your credit score, the less you pay in interest. If you have a low credit score, you pay more in interest. If you're a high risk to a bank, they're going to charge you more money. So people in the worst financial conditions typically have the worst scenario when it comes to a loan.
So check it out here. A FICO score of 760 to 850, you're doing great. You get an APR, that's an interest rate, of 4.6 percent. For an average home, your monthly payment is $1,543. Now if you're at the other end of the spectrum, you've got a credit score of 660 to 679, now your interest is 5.2 percent. You say, well, Gerri, that doesn't look like a big difference. Yes, it is. It's actually $112 more per month for the same loan. So again, here's what we see. The lower the FICO score, the more you are going to pay for that loan - T.J.
HOLMES: Yes, it's good to see it broken down in a chart like that. Sometimes it doesn't sound like much, 4.8 percent to 5.0 percent or whatever it may be, but those are dollars every month.
How can people - you just heard us talk to Ben Jealous there of the NAACP about that lawsuit. I mean how can people identify, maybe avoid and, I mean, how do you know when a situation like that might be about to affect you? That somebody could possibly discriminate against you because of the color of your skin?
WILLIS: Well, information is power here. You can't just deal with one mortgage lender, one mortgage broker. You really need to shop around and see what's on offer out there for someone in your situation. Everybody's situation is different when it comes to employment, your credit score. There are a lot of factors that go into what kind of loan you're going to get.
But let me explain something because I thought Benjamin Jealous - that story we've been seeing reports and studies out there where it's obvious that proportionately African-Americans and Hispanics have gotten worse deals out there in the marketplace. You have to make sure you have the information at hand to fight back, to know what you were due, to understand what kinds of terms you actually should actually.
Bankrate.com can help you with that. Hsh.com can help you with this. You've got to actually go out and get the information. Really shop around with a lot of different lenders. And remember, at the end of the day, some of this onus is on you. You've got to educate yourself to side step, to bypass, to not get these terrible loans out there.
HOLMES: Like you say, knowledge is power. Gerri Willis, full of knowledge. As always, we appreciate you, kind ma'am.
WILLIS: My pleasure. Good to see you.
HOLMES: Well, there's an underwater face-off. You may have seen this video. But this was between a man and a shark. Normally you might guess who would win, but this was not - this wasn't Jaws, OK.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: Change in America has always started with the young.
UNIDENTIFIED FEMALE: They answered a call.
UNIDENTIFIED MALE: The most powerful people on this planet right now is the youth.
UNIDENTIFIED FEMALE: Our generation is not going to be a generation of apathy.
UNIDENTIFIED FEMALE: They want to have an impact.
UNIDENTIFIED FEMALE: Something drew me inexplicably to service.
UNIDENTIFIED FEMALE: It's just a whole new generation.
UNIDENTIFIED FEMALE: They are young people who rock.
UNIDENTIFIED MALE: Young people actually do care about their future.
UNIDENTIFIED FEMALE: Every week we introduce you to the future. Our next leaders, changemakers and stereotype busters.
UNIDENTIFIED MALE: I wouldn't take no for an answer.
UNIDENTIFIED FEMALE: You can do anything. There is no limit.
(END VIDEO CLIP)
HOLMES: It just makes you feel good, doesn't that?
LAPIN: It does, warm and fuzzy inside.
HOLMES: Really, there's bad news out there and young people doing great things.
LAPIN: Yes, they do. They rock.
HOLMES: Nicole Lapin here, "Young People Who Rock." Who did you have rocking with us last week?
LAPIN: You like basketball?
HOLMES: Like this guy a lot. Like this guy a lot. Of course I do.
LAPIN: Have you ever played one-on-one with Dwyane Wade?
HOLMES: I have not. I wouldn't want to.
LAPIN: Guess what? I had a one-on-one with Dwyane Wade last week.
HOLMES: On the court?
LAPIN: Not on the court.
HOLMES: OK.
LAPIN: I sat down with the Miami Heat guard and the Olympic gold medalist to find out what he is doing to help some folks out. When we sat down, he told me how he wants to change the world.
(BEGIN VIDEO CLIP)
DWYANE WADE, MIAMI HEAT, NBA STAR: I never had no one come, you know, to the community I grew up in and give out that helping hand. And, you know, to give us hope in our community that we can do something special, you know? Always heard that we could, you know, it's one in 1 million or something like that. Well, our job and my job at the Wade World Foundation is to go out and let these kids know that, you know, that we believe in them. And it's more than what you see out the front - the front window or your front door that's in life. And you can do, you know, anything you want.
(END VIDEO CLIP)
LAPIN: He is a great role model, T.J. He was the spokesperson for National Recess Week. He started Wade's World. And you remember he made headlines when he gave a Florida woman a house when it burned down.
HOLMES: Right. Yes.
LAPIN: He's a good guy. And we see a lot of bad news, especially in sports with steroids and bad stuff.
HOLMES: Thank you. We appreciate the good news.
LAPIN: You are welcome.
HOLMES: We really do. And I just want to put my bid in. He should be the MVP. A lot of people don't think that. LeBron, Kobe.
LAPIN: I'm not in charge of that.
HOLMES: OK.
LAPIN: I'm just in charge of featuring him on "Young People Who Rock." HOLMES: I'm pulling for Dwyane, but he's - I mean that's a famous - a familiar face. But you don't have to be a famous or familiar face to rock.
LAPIN: No, no, no, no. No, you don't. Here is our rocker today.
HOLMES: Our rocker. All right.
LAPIN: McKay Hatch (ph). He is a California teenager who said no to cussing. He started this bonafide craze. He even made a video.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: If you want to hang with us, I don't want to hear you cuss. If you want to hang with us, I don't want to hear you cuss. Don't cuss.
(END VIDEO CLIP)
LAPIN: Don't cuss, T.J. His hometown declared the first week of March to be no-cussing week. You might remember this. He joined Kyra in the NEWSROOM before it started. So he is back to tell us how no cussing week went. And you can watch my interview with him today at 3:30 Eastern Time on cnn.com live. Wash your mouth out!
HOLMES: No. Does he have replacement words? I mean is he telling people, instead of saying this, say that?
LAPIN: I'm going to find that out. This is what we call a tease.
HOLMES: A tease.
LAPIN: So watch later today on cnn.com live or go to cnn.com/youngpeoplewhorock.
HOLMES: OK. Well, they're telling me - they're not - they're cussing in the back telling me we need to wrap this thing up.
LAPIN: Oh, stop. They are not. I know them.
HOLMES: They are. But we have to leave it there.
Nicole, thank you so much.
LAPIN: You are welcome.
HOLMES: We will see you soon. No cussing.
All right. Where are we - we're heading over to Jacqui Jeras.
Jacqui, I've been waiting to talk to you all day about this video. All right.
JACQUI JERAS, AMS METEOROLOGIST: It's amazing, isn't it? HOLMES: Yes, it is amazing. For folks who don't know what we're talking about here, man versus Jaws. Let's take a look at this picture. Not quite Jaws. I think Jaws, Jacqui, won most of these bouts, didn't he?
JERAS: It was a close - well, eventually, right, the diver made it out OK and actual had to kill this (ph) from what I understand.
HOLMES: Had to kill the shark. A spear fisherman. His name is Craig Clasen. A 12-foot tiger shark began circling him and his friends. They were out filming off of New Orleans in the Gulf of Mexico. He says he's been around these big guys before. Never been attacked by one. So in self-defense, he said he fired his spear gun into this 1,000-pound sucker.
JERAS: Like dozens of times.
HOLMES: Yes. Stabbed it in the neck. And he won, Jacqui.
JERAS: It's awful! It's amazing that he won, a, right? But, b, I don't know, would you be brave enough to do that? What would you do, T.J.?
HOLMES: What I would do is not be in the water in the first place where I know sharks have been known to be seen.
JERAS: They have been known to be seen. You know, I think it's one of those fears that everybody has, right, getting in the water. You just have that little thing in the back of your mind that says, ooh, I've got to look out for the sharks.
HOLMES: It is.
JERAS: But believe it or not, you know, this doesn't happen that often. I mean, unprovoked shark attacks. It's more likely to happen if you're by yourself in the water.
HOLMES: That's right.
JERAS: Only like 50 to 100 of these occur worldwide. The most likely place in the United States - guess where?
HOLMES: Yes, where? I don't know.
JERAS: Pick a state.
HOLMES: It's got to be Florida.
JERAS: Yes, Florida. And, you know, a lot of the reason why that is, is just because, look at Florida. I mean look at the state. Look at how much coastline. Look how much beach you have there. So that's a lot of the reason.
HOLMES: Yes.
JERAS: Number two, Hawaii. Number three, California. HOLMES: OK. See, I lived out in the bay area for a while and I surfed a couple of times. Not a lot of sharks necessarily there. But still, it just, in the back of your mind, they tell you when you're on the board, if a shark's looking up, your feet are dangling and you just look like a piece of meat. And so it does.
JERAS: You look like a seal. That's what they say. You look like a seal. And that's why a shark would try and come and get you.
HOLMES: OK.
JERAS: Water temperatures plays a role, too, by the way. Throw in a little weather in there for you.
HOLMES: Throw - we appreciate the weather. What's that little move you made again? Yes, there it is, Jacqui.
Jacqui, always a pleasure.
JERAS: Any way. Yes, well, water temperatures, you know, they - sharks live in all parts of the world, cold water, warm water. So it's different types of sharks that would probably get you in California compared to what you'd be seeing in the Gulf of Mexico.
But, hey, a lot of spring breakers out there, by the way, thinking about getting in the water as we approach that weekend. Unfortunately, take a look at the map here. Not looking so fantastic, especially for those Gulf Coast states. Unfortunately, we've got a lot of wet weather to talk about.
Padre Island, one of the big places people like to go, you're looking at showers and 65 degree temperatures throughout the weekend. Heading over towards Destin, Ft. Walton Beach, again, mid 60s and plenty of rain showers on and off. Mostly a washout, however.
If you're looking for some sunshine, you've got to go south, south, south, into Florida, my friends. Eighty-degree temperatures, Ft. Lauderdale. Lots of sunshine. Looks fantastic. And into the Bahamas, looking good, too. Eighty degrees and plenty of sun throughout the weekend if you're thinking about that.
Now, back here at home, for the most part, you know, if you're staying at home for spring break, temperatures have been really cool across the south and that's mostly because of that rain, the system that we've had here. Now things are going to be changing a little bit, especially as we head towards the latter part of the weekend, into early next week.
Those of you suffering and wanting to take spring break across the upper Midwest, where temperatures have been subfreezing as of late with blizzard conditions, look at this nice big change. Twenty degrees above normal for you in Omaha, Des Moines. Minneapolis, look at that, 15 degrees above normal. So if you're stuck at home and you're, you know, in the Midwest, it's looking a little better for you late in the weekend.
HOLMES: It's looking a little better, or you can go to Florida and maybe risk getting taken out by a shark.
JERAS: You know, that or a jellyfish.
HOLMES: All right.
JERAS: Those are my two that I watch out for.
HOLMES: Jacqui, it's a pleasure. Thank you so much.
All right. Will high-speed trains ever be the magic bullet for America's transportation needs?
(COMMERCIAL BREAK)
HOLMES: All right. We do want to bring you a statement we just got in from Wells Fargo. We've been telling you about the NAACP seeing - actually filed a class action lawsuit against HSBC and also Wells Fargo saying that they are discriminating in their practices, calling it institutionalized racism, essentially giving blacks subprime loans when they have the same qualifications as whites for these mortgages.
But the statement coming in from a Wells Fargo spokesperson saying, I'm reading here directly, that "The NAACP's allegations are totally unfounded and reckless." We have never tolerated, and will never tolerate discrimination in any way, shape or form in any of our business practices, products or services. It goes on to say, "we intend to vigorously defend these unfounded allegations and are confident we'll prevail."
But again, a statement we're just in from Wells Fargo. Did want to pass that along to you about that suit from the NAACP.
All right. All aboard! The bullet train. Environmentalists say a high-speed rail system could dramatically cut down on the 800 billion miles a year that Americans fly. Cnnmoney.com's Poppy Harlow has our "Energy Fix" from New York.
And, Poppy, all I care about is, am I still going to have to go through a long security line to get on a train?
POPPY HARLOW, CNNMONEY.COM: Probably not. And I prefer trains to planes anyways. So this is the way people in Europe travel often. You see a lot of bullet trains in Asia and in Europe. There's a movement now to build a network of them here in this country because the stimulus bill, that sets aside $8 billion for investment in high- speed rail. The request came from President Obama himself. He is a big believer in this kind of travel. Take a listen.
(BEGIN VIDEO CLIP)
OBAMA: If you go to Shanghai, China, right now and they've got high-speed rail that puts our railroads to shame. I'd like to see high-speed rail where it can be constructed.
(END VIDEO CLIP) HARLOW: All right, different regions of this country will be competing for that stimulus money. Take a look at the map there of some possible routes. You see it really all over, except for the middle of the country right there. That's lacking.
We should also mention, though, that Las Vegas wants a piece of the proposed money for its bullet train to Anaheim, California. Spreading all that money out, though, T.J., it's not going to go very far if you chop it up to all those different requests. Southern California, right now, probably the furthest along.
What you're looking at now is video of what is planned to be built between San Francisco and Los Angeles. $9 billion has been approved to finance a bullet train that would take 2.5 hours between the two cities. That is much faster than driving, especially when you consider any traffic involved. But the $9 billion in funding, plus California's slice of that stimulus money, it doesn't come close to the more than $30 billion it's estimated to cost to build that entire corridor. And, of course, the trains, T.J. So still a long ways off.
HOLMES: But that one sounds good. I've driven down that I-5 from San Francisco to L.A.
HARLOW: Bad traffic.
HOLMES: Yes, it ain't fun sometimes.
All right, Poppy Harlow, we do appreciate you. Thank you so much. Keep us informed about that.
Also, how much would you pay today for lunch? If you walk into your lunch place and there are no prices on the menu.
(COMMERCIAL BREAK)
HOLMES: Well, imagine if you could go into a restaurant and name your price. Yes, you tell them how much you'll pay for your food. That is exactly the deal at a cafEe in Ohio. Kathryn Burcham of affiliate WHIO takes us to lunch.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: And how much would you like to pay for it?
KATHRYN BURCHAM, CNN CORRESPONDENT, (voice over): They can't believe their ears.
UNIDENTIFIED MALE: What would you like to pay for it?
BURCHAM: They're confused.
UNIDENTIFIED MALE: I mean you get to chose what you think is fair to pay for a small hot chocolate?
UNIDENTIFIED FEMALE: (INAUDIBLE) really?
BURCHAM: But once they get it . . .
UNIDENTIFIED FEMALE: That's kind of odd.
BURCHAM: It's decision time.
UNIDENTIFIED MALE: How big is it? Is it grilled? Is it a cold sub?
BURCHAM: How much is that sandwich really worth?
SAM LIPPERT, OWNER, JAVA STREET CAFE: Most people, when they're confronted with that, they kind of think that it's some kind of joke.
BURCHAM: Yesterday, Sam Lippert, the owner of Java Street Cafe, erased the prices on the menu.
LIPPERT: In the current economy, maybe that's what people need to feel comfortable going out again, is they need to know that they're going to pay what they feel is a fair price for what they're getting.
BURCHAM: Customers get to choose that fair price, which Lippert says is different for everyone.
LIPPERT: If someone's only making minimum wage, fair price for a sandwich is a lot different than if someone's making $15 or $20 an hour. And if someone's unemployed, fair price for a sandwich is different yet.
BURCHAM: Perhaps you're thinking like we did - that surely someone would take advantage of this good-faith offer.
UNIDENTIFIED MALE: So she underpaid a little bit, but that's all right. She overpaid by about the same amount.
BURCHAM: But the man taking the money says Java Street's new policy is meeting the bottom line.
UNIDENTIFIED MALE: People used to come in and they would overpay or underpay in the form of discounts or tips. So it's not really all that different.
BURCHAM: And customers tell us most importantly, paying a fair price is really just a way of paying it forward.
UNIDENTIFIED MALE: It will make me come back here.
(END VIDEOTAPE)
HOLMES: All right, it's my lunch time. But CNN NEWSROOM continues on right now with Don Lemon.
