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Parents of Private-School Students Struggling to Pay; Flooding Threatens North Dakota; Banking on Treasury Program to Wipe Out Bad Assets; Mount Redoubt Erupting in Alaska

Aired March 23, 2009 - 10:00   ET

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

HEIDI COLLINS, CNN ANCHOR: It's a plan to help the banks, and then help you. The Obama administration announcing a program to buy as much as $1 trillion in bad assets and wipe them off the bank's balance sheets. In theory, that would allow the banks to resume normal lending, freeing up credit for consumers and small businesses.

CNN's Money Team is on top of the story. Christine Romans is in New York to explain what these troubled assets are, and what the plan means for you. But we do begin at the White House where Suzanne Malveaux has the plan's details.

So Suzanne, what's the bottom line here? What do they hope to accomplish?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Heidi, the bottom line is the government is really trying to help these private companies buy up these troubled assets from these banks, essentially it's going to be initial investment of $75 billion to $100 billion, but they're hoping over time that could expand to $1 trillion. And how is this going to work?

Well, essentially, it's going to be a partnership, these private firms working with the government, the banks are going to go ahead and try to get rid of some of those bad assets. They're going to auction them off to the highest bidder and then the government is going to come in and essentially subsidize 50% of the costs, essentially taking some of that risk away from those private companies, trying to share the risk.

What does that mean, though? It means that taxpayers, you and I are also taking on some of that risk to make sure that these banks get rid of these bad assets. I did have a chance to ask the chairwoman of the Council of Economic Advisers, Christina Romer, essentially what would happen if none of this works. If these companies don't bite and they say hey, we're not interested in this.

Here's how she responded.

(BEGIN VIDEO CLIP)

CHRISTINA ROMER, CHAIRWOMAN, COUNCIL OF ECONOMIC ADVISERS: I think the key thing is, if this one doesn't work, it's like any policy, you take your best shot. If it doesn't work, you adapt, you innovate and you come up with something that does. We've thought about this a lot. We've talked to investors, we've tried to make sure that there's a market. If it doesn't work exactly as planned, we'll tweak it.

(END VIDEO CLIP)

MALVEAUX: And Heidi we don't know yet what those tweaks are, necessarily. So this is something that they at least acknowledge that there is risk involved. They believe that perhaps this will be enough of an incentive, but it's far from certain, Heidi.

COLLINS: Yes, absolutely. And Suzanne, we have a look at the Dow right below you. Right now too, I just want to point out to everybody, Dow Jones industrial average is now up almost 210 points as we talk here today. Really, I do wonder, Suzanne, how they're going to sell all this to Congress and then of course the American people. It's a big task.

MALVEAUX: It's a tough sell too. Because think about the week that we came off of just last week. There was fury, outrage over those executive bonuses to AIG. People feeling like their money is being wasted, that there is no accountability. So obviously, there is a crisis in confidence here. And they have to come out very hard, very strong, the president, as well as his top economic advisers to continue to say that this is something they believe in, that's it's going to work, and they're going to hold people accountable. That is what we're going to hear from the president later today, Heidi.

COLLINS: Yes. All right. We'll be watching. Suzanne Malveaux, thank you.

It's been a big time buzz word from Wall Street to Main Street. So just what exactly are these toxic assets we keep talking about? Here to explain it all our Christine Romans from New York.

Hi there, Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Hi.

COLLINS: Exactly, what are they? How do we explain to people that they have to go?

ROMANS: If I had a dollar for every time I heard the word toxic assets.

COLLINS: I can't hardly say it.

ROMANS: Well, what are they? The government, the Treasury Department calls them legacy assets.

COLLINS: Yes.

ROMANS: Meaning these are things from before. They're on the banks' books that are holding them back. They basically come down into two different categories. Legacy loans or toxic loans, these are real estate loans held by the banks. And as you know, many of those real estate loans are either subprime loan. Even prime loans are starting to go bad as people lose their jobs and can't afford to pay back their mortgage payments every month as they go into default. So those are one thing and the other things are securities backed by loan portfolios. These are legacy securities. There's a secondary market for all of these. So these are packaged up pieces of loans that are bought and sold and traded among investors. And so these are securities that are held by banks, they're insurance companies, pension funds have them, mutual funds have them. You definitely have some exposure to them probably in your 401(k). They're also held by individual retirement accounts. So these are the secondary market has really been broken by this whole financial crisis and they're trying to get that healed. And that would be good for everybody.

COLLINS: Yes. And so that is exactly how it's going to affect regular people like you and me.

ROMANS: Absolutely. I mean, how is the viewer affected by what the Treasury is trying to do? Well, if they are successful, a credit gets flowing again, the banks can lure new or track new private capital, the banks get healthy. You can't have a recovery in the economy until the banks are healthy again.

I mean, there's no doubt about that. I mean everyone agrees on this. So trying to get the banks healthy first and then that filters all the way down to everybody. That means we can get loans, small businesses can get loans. They can get more hiring. The secondary - the housing market gets better, the secondary markets starts to move. And so that means there's more consumer loans available, that's for student loans. That's for cars. That's for credit cards, everything.

COLLINS: It goes on and on. Hopefully...

ROMANS: It's important stuff. It really is.

COLLINS: Hopefully they can get on the same side of the fence. The banks and the administration. So we will be watching. Christine, thank you.

ROMANS: Sure.

COLLINS: CNN Tuesday night, I want to remind you about this. President Obama faces down the press. CNN is there live until every question is asked and answered. Our special coverage begins Tuesday night, 7:45 p.m. Eastern.

The city of Fargo, North Dakota, closing some bridges because of fears a river may rise 17 feet above flood stage.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We're closing up some of these just because the city thinks it's going to, you know, maybe get to 17. So we're going to try to be safe. Get everything done before it does rain.

(END VIDEO CLIP)

COLLINS: Hundreds of thousands of sandbags already been filled, but city officials say more than a million are actually needed to protect homes. And that's why an urgent plea is going out for volunteers.

Rob Marciano standing by in the weather center now, talking a little bit more about this.

Incredible video that we've been seeing here, Rob. And look at all of this sandbagging. A million sandbags they need?

ROB MARCIANO, CNN, METEOROLOGIST: They've been hustling. And this flood is going to be one of historic proportions if the forecast verify, Heidi. So they've had fair warning, but when you're talking about that many sandbags trying to protect that many homes, it's a daunting task to say the least.

Showed you this graph from the last half hour, it highlights how far the river's expected to rise over the next few days. Expect it to peak right at this line, which is record flood stage, the pink anywhere in the pink is major flood stage. We're already into the moderate flood stage and the river's going to rise at least another 15 feet here according to this forecast.

So look there. Much of North Dakota under flood warning. The Red River's not the only river that's going to see this rapid meltoff and on top of that a fair amount of moisture rolling in. So this is the forecast for the next 48 hours. We've already seen a decent amount of rainfall in the last 48. Another two to three inches potentially in some spots over the next 48 hours. So a lot of this actually ironically enough on the western half of the state is actually going to be in the form of snow.

The two sides of this very strong system, very dynamic system. East side is warm and wet, the west side is cold and snowy. Blizzard warnings are posted for parts of the black hills and much of western, South and North Dakota, and right now, we're seeing winter storm warnings in parts of Wyoming. They're just getting dumped there, 20 to 40 inches potentially of snowfall.

COLLINS: And then it all melts.

MARCIANO: Yes, and when it comes down, it's going to be blowing sideways too. So very bad visibility. And then also today I want to mention this, severe thunderstorms potentially across parts of the plains. We've got a live shot of Tulsa? There you go, temperatures in the 60s. It's all juiced up atmosphere, KOTV, right off the pop KOTV, the affiliate there, this is the time of year for severe weather as well as blizzards across parts of the plains.

COLLINS: Wow, all right, you've got your hands full today, Rob. We sure do appreciate it. We'll check back later on.

COLLINS: Meanwhile the Red River not the only river in North Dakota in danger of bursting its banks. Troy Mosbrucker is the mayor of Mott, North Dakota says his town is actually already under water. He's joining us now by phone.

Mr. Mayor, if you can hear me OK, tell us the situation there. MAYOR TROY MOSBRUCKER, MOTT, NORTH CAROLINA (via telephone): All right. Now we've been monitoring our flood. We've had it since Friday. Last night the river finally crested, it dropped about a foot last night. So the way it looks, the water is dropping right now for us.

COLLINS: So what's the deal with the residents of the town? Is everybody out? Did they have to evacuate?

MOSBRUCKER: Well, we have two sides to our town. We have the east side of Mott, which is protected by a dike, and the west side is not. And we've evacuated ten families that were left after the '97 flood, we evacuated them on Friday morning. And right now the west side of town is nobody's allowed in there.

COLLINS: Yes, so what does this mean when you talk about more bad weather that's expected? We just had our meteorologist Rob Marciano telling us that they expect to have more snow, more rain, and in your area, what do you do next?

MOSBRUCKER: Well, not much. We've got to prepare for it. Right now it was 50 degrees yesterday, today they're forecasting 18 inches of snow for us. It's going to make things worse.

COLLINS: Wow.

MOSBRUCKER: It's going to make things worse.

COLLINS: Wow. Well, boy, we certainly do wish you the very best. And, of course, all of the people in your area, as well. What do you need? Are you getting the help that you need? We know that the National Guard and Fema have been dispatched to certain areas in North Dakota. Are you seeing any of that where you are?

MOSBRUCKER: Well, we've been working with the Red Cross and stuff. We had a meeting with the residents on Wednesday of last week. We prepared for it. And when it happened, we were ready, and we're pretty lucky we got ready for it. And everything was in place when it happened. And everything went good.

COLLINS: All right. We sure do appreciate your time there. Troy Mosbrucker from Mott, North Dakota. A whole lot of people as you can see sandbagging and trying to keep their state really because its affecting many areas of North Dakota, more than 6,000 homes in jeopardy of the Red River overflowing it's banks as well. So we'll keep an eye on that story for you here on CNN NEWSROOM.

Alaska's Mount Redoubt is still putting on quite a show. The 10,000 feet volcano located about 100 miles southwest of Anchorage has erupted five times now since early this morning. Redoubt began erupting about 2:00 a.m. Eastern this morning, some plumes of smoke and ash were blown 50,000 feet high.

Look at those pictures, beautiful but scary too.

An ashfall advisory was in effect until 8:00 this morning. Redoubt last erupted 20 years ago. We'll have geophysicist, Peter Survali from the Alaska Volcano Observatory, later on the CNN NEWSROOM to tell us more about what's going on there.

In a Montana cemetery, towering flames, looming questions. What caused the plane to nose dive straight out of the sky?

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN, the most trusted name in news. Now back to the CNN NEWSROOM.

COLLINS: In Montana, investigators will search through a cemetery looking for even the smallest clues to a plane crash. The single-engine turbo prop nose dived into the graveyard yesterday just 500 feet short of the Bert Mooney Airport in Butte, Montana. All 14 people aboard are dead. Seven of the victims were children.

So what could've caused the turbo prop to crash? Early signs suggest weather was not a concern. One witness says the plane seemed to jerk dramatically to one side before plunging straight to the ground. Another question for investigators, was the plane overloaded?

The airplane in its densest seating configuration that I've ever seen really only seats 11 people. And so if they really were up to 17 people aboard, that's going to stick out to investigators. Investigators think the plane was carrying family members to a ski trip in Montana. One newspaper reporting three of the children killed were preschoolers.

Here's a route now of the doomed flight. It began the day in Redlands, California, had two stops in the northern part of the state before continuing on into Montana. It was on final approach when something went terribly wrong. I want to get the very latest from the scene now.

CNN's Jim Spellman is joining us by phone.

Jim, can you tell us a little bit about what's happening there today?

JIM SPELLMAN, CNN CORRESPONDENT (via telephone): Right, I'm right here at Holy Cross Cemetery. And a medical triage coroner's unit from the sheriff are arriving now. NTSB investigators just left the scene.

I tell you Heidi, only about 200 yards away from the crash scene and I can't make out any wreckage at all. This was a devastating accident. As you mentioned, they'll be looking at whether this plane was overloaded and other causes at this port, but they barely have anything to even go on here. This is just destroyed, this plane is just gone.

COLLINS: Yes, I imagine they're going to be looking at a lot of the flight records, of course, that were filed before this aircraft ever even took off from California. So maybe they'll be a little bit more of the weight of the aircraft and so forth. Weather, that seems to be a question that everybody asks when a plane goes down. What are you hearing where you are?

SPELLMAN: Well, yesterday was clear and much warmer than it is now. It's snowing and icy here now. But the same weather was not an issue. Really just so close to the runway, there's going to be, you know, going to be seeing if there was enough fuel. One of the complications could be in a large commercial aircraft they already have voice cockpit voice recorders and voice data recorders, this plane turbo prop plane not required to have that. They'll be looking for that if it does exist.

COLLINS: And we should also mention, too. No control tower there at that particular airport, a very small airport. Common that a control towers are not there. It wouldn't have been communication anyway, for us to check out on that front. Jim Spelman, we sure do appreciate it live for us in Butte, Montana. We of course we'll stay on top of any developments out of this story as well

In Japan, now, high winds are suspected in the deadly crash of a Fedex cargo plane. A security camera at the Tokyo Airport captured the plane skipping down the runway before apparently flipping and bursting into flames. Incredible video. Both American crew members aboard that flight are now dead. The flight had originated in China.

It's an alarming number. Heart failure strikes one in 100 blacks under the age of 50. Well, take a look at why and if it can be prevented.

(COMMERCIAL BREAK)

COLLINS: A new study finds shocking racial disparities in heart health. Specifically, that African-Americans develop heart failure at a rate 20 times higher and at much younger ages than their white counter parts.

Our senior medical correspondent Elizabeth Cohen joining us now to talk a little bit more about this.

The numbers sound pretty incredible. Are doctors surprised by this too?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: You know what, they're not necessarily. The ones who study it all the time. They said even for them, these numbers were really incredible. They expected something like this, but not necessarily these numbers. And the study is really long-term. They looked at folks over a 25-year period at a time. And that's really unusual, 25 years of follow-up.

And what they found when they looked at heart failure is that - take a look at this. The heart failure rate for your average 35-year- old black person is the same as the heart failure rate for your average 55-year-old white person.

COLLINS: Wow. COHEN: So in other words, a 35-year-old black person is basically in the same situation as a 55-year-old white person. Now, one of the many reasons for that huge discrepancy is that high blood pressure, which is a contributor to heart failure that high blood pressure is three to four times more common in blacks than in whites.

COLLINS: Why?

COHEN: There's probably a whole bunch of reasons. Probably some of them are genetic, some of them aren't. But one of the big reasons is, that more and more they're finding young black people with high blood pressure, like we're talking people in their 20s.

COLLINS: Yes.

COHEN: And there is a concern that when a 25-year-old shows up with high blood pressure that a doctor might not treat it. They might say let's wait, they might say you're only 25. So there's definitely a thought here that doctors need to take high blood pressure in young people more seriously.

COLLINS: Well, yes. it sound like it. Certainly, anyway from this study. 25-year study, that really unusual. We always ask how long were they able to follow these people?

COHEN: Sometimes it's a year or two or maybe 10 but 25, you don't see that very often.

COLLINS: Well, keep us posted on this if anything comes of it. CNN's senior medical correspondent Elizabeth Cohen, thank you.

A new analysis by the "Associated Press" finds a threat in our nation's nursing homes. They're becoming dumping grounds for more younger people who are mentally ill. Past incidents show that can lead to more violence against elderly residents. Behind the trend, mental hospital closings and bed shortages.

As many people struggle with the economy, the American dream slipping away or still within reach? Three people share their personal stories.

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM. Heidi Collins.

COLLINS: A house, an education, a car, these are just a few essentials to the American dream. But has the recession put some of those dreams on hold? That's what we're talking about today in our snapshot across America.

Joining us this morning to do just that is Mike Green, he's a third generation auto worker. He's joining us from Lansing, Michigan. And Carmen Cruz, the small business owner and first generation Hispanic from Miami. And South Coatesville, Pennsylvania mayor James Kennedy. He is 91 years old and lived through the Depression. Thank you so much for being here with us this morning. Everybody, Mike, I want to begin with you if I could, listen you got your job at GM when you were 17 years old, but your son who is 24 right now, he's already lost his. This has got to be really tough for you.

When you think about the American dream, what is that? How do you define it?

MIKE GREEN, THIRD GENERATION, GENERAL MOTORS CIBO: Well, I think most people, you know, the dream is to maybe have a little cabin in the woods and a little money left over once you're done with your working career. And you know, in the past, that's been done by education and opportunity. And when you look at those things today, we're, you know, people are going to be struggling to be able to pay for education and the opportunity keeps shrinking from the jobs that we're losing. So it's, you know, that's in danger of happening.

COLLINS: Yes, that's for sure.

Carmen, how about you? I know that your parents came to the United States, I should say, from Cuba and the Dominican Republic, as well. When you tried to find the American dream, what does that mean to you?

CARMEN CRUZ, PARENTS CAME TO THE U.S. FROM DOMINICAN REPUBLICAN: Well, what that means to me at this stage of the game is to have the opportunity to be able to not only provide an education for my children, but at this stage of the game, more to help my mom and my dad and be able to take care of my family as a whole. Now, I'm part of the sandwiched generation being able to help both sides of the tract and it's just a little bit more difficult, but it's allowing us to get back to the basics and trying to keep the family together.

COLLINS: Yes, it's sort of a role reversal, at least from what I hear.

CRUZ: Role reversal is a big problem, especially in our society, and especially with our culture. I grew up where Dad went out, Mom stayed at home. Now my husband is actually helping me with our business and I'm the one that's going out for the most part. And it ends up being a situation that it becomes a challenge, even with the family. They're not understanding it. It's really different. It takes a little bit of time to adjust to this new position and this new job description that I have.

COLLINS: Yes, absolutely. Well, Mayor Kennedy, your story is pretty incredible, as well. I mean you lived through the Great Depression, two world wars, and the Civil Rights Movement. When you define the American dream after everything that you have lived through, your life experiences, what is the American dream to you?

MAYOR JAMES KENNEDY, SOUTH COATESVILLE, PENNSYLVANIA: The American dream to me is to have a job and be able to make that living. And if you have a family, send your children through college. And try to get the necessities of life. Living through the Depression, it was hard, but today it's really hard on the account of the economy. But we can make it if we try, but having a dream - having a job, and if a child doesn't have an education these days, they can't get a decent job.

COLLINS: Yes.

KENNEDY: So we want the children to go to school because it's global now. It used to be the United States.

COLLINS: Right

KENNEDY: But it's all the countries in the world.

COLLINS: Yes.

KENNEDY: You want the child to get an education, to have a job and they get some of the necessities in life.

COLLINS: Yes, it sounds pretty simple, doesn't. Unfortunately, it just doesn't seem like it is anymore.

Mike I want to get back to you, do you think they'll get better. I mean, specifically for the auto workers?

GREEN: I mean, we're hoping it gets better, that we're doing the right things. They're down in Detroit right now putting the finishing touches on a package to be more competitive.

You know, when you look at, you know, generations gone by, we've been raised that you always looked at your children are going to do better than what you've done. And you know, that's kind of in danger now. I mean, to us, you know, being a third generation autoworker, that's allowed me to stay close to family. You know, with my son being fourth generation, not having a job, is he going to have to move out of the community, maybe move out of the state?

COLLINS: Yes.

GREEN: That's allowed us to stay close as a family, and that means a lot. That's part of the American dream, staying close to your family.

COLLINS: Yes, and thanks for those great pictures, too. We were just looking at your family pictures there.

Carmen, what about you? Do you think things are going to get better? What's the future for Latinos in the United States?

CRUZ: Well, what I can say is that we have a bright future ahead of us. At this stage of the game, now all of the opportunities have been offered for us. This week, my brothers and I celebrated the four of us actually graduated from college. So, from my parents, who did not go to college, to us to finish college, my children are going to college. It's a given, that it's just as, you know, going to high school, college is just the next thing to do. So, there's really not an option in that respect.

With regards to business and education, well, I think that one of the most important things that I would try to retain for us as Hispanics is to make sure that we keep our language, but understand that we're here and English is very important for us, as well. And health care is a big issue for us here. But, business as usual, I mean, we really need to focus on saving money, and not overspend and really be focussed on what's really important and take care of the needs, not necessarily always the wants. COLLINS: Yes. Boy, that's a toughy, too, for some people. Mayor Kennedy, back to you. What do you think this economic crisis is going to teach us? Particularly because I know as we have said before, you lived through the Great Depression.

KENNEDY: This economic crisis is going to teach us -- I mean it's caused by greed. This is men wants -- the love of money. But it's going to teach us how to save money and be careful how we invest. Be careful how -- what -- how we invest our money.

This is what's going to teach us a lesson because we have a lot of unscrupulous people out there. And they'll do anything to you, and if you're not careful, you'll lose all of the money you have. And so, this economic crisis is going to wake us up and make sure that we know what we're doing putting our money in the right places at the right time.

COLLINS: Personal responsibility, it seems to be very important in all of this. There's no doubt about it. And Mayor James Kennedy, sure do appreciate that. You're a pretty incredible guy. Mike Green and Carmen Cruz, we sure do appreciate your time, as well, this morning. Our "Snapshot across America" today.

Difficult choices during tough times. Many parents must make sacrifices so they can continue to afford private schools for their kids. Here now, CNN's Susan Roesgen.

(BEGIN VIDEOTAPE)

SUSAN ROESGEN, CNN CORRESPONDENT (voice-over): For most parents, private school tuition has never been cheap. But these days, some parents are struggling more than ever to pay it.

UNIDENTIFIED MALE: Marian Catholic High School tuition.

ROESGEN: Leo and Pam Pochinskas had to make a choice: Take their kids out of private school or take out a second mortgage. They took out the second mortgage.

LEO POCHINSKAS, FATHER OF PRIVATE SCHOOL STUDENTS: So I've got to pay it off. It might take me five years or ten years. This is an investment for a real person.

ROESGEN: Leo is a musician who's had his hours cut in half at a local music store. Pam works in a corporate office that shrunk from five people to two. PAM POCHINSKAS, MOTHER OF PRIVATE SCHOOL STUDENTS: There are nights when I do have -- when I don't sleep. And there's nights when you have the stomachaches, and you say -- you know, is this all going to turn around? And, you know, am I -- are we going to be a statistic?

ROESGEN: Joey Pochinskas is a freshman at Marian Catholic High School. Emily Pochinskas is a senior. They're combined private school tuition is about $15,000 a year. And the alternative is a lot closer and cheaper.

(on camera): In this case, the public school is just a few blocks away, and they wouldn't have to spend thousands of dollars to send their kids here.

(voice-over): But Pochinskas believe their children are getting a better education where they are. A few weeks ago, the principal of the private school had to send 300 students home because their parents hadn't paid the tuition on time.

SISTER CATHLEEN ANNE TAIT, PRINCIPAL, MARION CATHOLIC HIGH SCHOOL: I think there are families who say, we just simply can't do that. You can't forego a mortgage payment forever. You know, so there are people that have to make those choices.

ROESGEN: And that's why the Pochinskas will skip eating out, keep clipping coupons and hang on to a 22-year-old car.

EMILY POCHINSKAS, PRIVATE SCHOOL STUDENT: I know that what they're doing for me, like, it's not necessarily the easiest thing because I, you know -- my mom comes home, some days I make dinner, and we'll sit down and we'll talk. And, you know, I'll be like how is everything going, Mom? She's like, yes, you know, another person was let go today.

Susan Roesgen, CNN, Chicago.

(END VIDEOTAPE)

COLLINS: It's happened five times already, all in one day. Alaska's Mount Redoubt erupting after being dormant for 20 years.

(COMMERCIAL BREAK)

COLLINS: All right. We are keeping a very close eye on severe weather out West this morning. In fact, Rob Marciano's working hard on it and has more of the details. Of course, Rob, one of the things we're talking about for sure as we look at the sandbagging going on in North Dakota is the flooding.

MARCIANO: Yes, they're just trying to get this ramped up so they can try to protect this town and at least 6,000 homes, Heidi.

COLLINS: Yes.

MARCIANO: Think about how many people affected by this river, and we think, you know, if you live outside of the Plains, and you think about Fargo, North Dakota, you think about a movie, you think about a place that may not be all that populated, but there's a ton of people that live in this part of the world.

COLLINS: Yes, we're talking about the Red River, too, we should say. Right?

MARCIANO: Yes, well, the Red River, specifically, and interestingly enough, this river actually flows north into Canada. But it's one of the main outlets from snow melt, which, by the way, they've had quite a bit of snow pack this year. And still a lot of it on the ground. They've had temperatures in the 40s and 50s, well above freezing. And now they're seeing rainfall, as well.

So, this is the recipe for significant flooding, and that's exactly what they're seeing right now. Big red "L", that's creating the lift. It's pulling moisture in from the Gulf of Mexico, also pulling in heat. So, the melt coupled with the precip is adding insult to injury here. So, every county in the state of North Dakota is under a flood warning. So, that not only includes the Red River here, but also the rivers that are into the western half of the state, which on top of seeing flooding are also seeing winter precipitation in the form of heavy, heavy snow blizzard conditions.

So, a nasty scenario, certainly, for the folks who live across all of the Dakotas and South Dakota, western part of South Dakota, that will be mostly in the form of snow. So, this is how it's shaping up, Heidi.

Western -- eastern parts of Wyoming, you can kind of see the swirl in the atmosphere. This storm has been very slow to get out of the Rockies. And because it's such a slow-mover, that obviously will kind of exacerbate the flooding situation. We saw significant rainfall last night across the Red River. It's not raining as hard right now, but another batch of precip is expected to develop here through the day and later on tomorrow, as well. Again, 20 to 40 inches potentially of blizzard conditions across parts of the western Dakotas.

(WEATHER REPORT)

MARCIANO: While we're on this topic, the other breaking news from the natural disaster front...

COLLINS: Yes.

MARCIANO: ... is what's going on in Mount Redoubt. This is a cool animation which simulates what that -- the release of the ash into the air will do with the wind currents. So, there's a readout with the eruptions ongoing, and I think you're going to be talking to an expert here pretty soon. He'll give us an idea of how long they expect those eruptions to last.

But you can see the ash pretty much fans out over a very wide area. We've got winds at different levels of the atmosphere going in different directions. So, that will prevent most of this ash to get into the highest -- more highly populated cities like Anchorage. But it's still creating problems, certainly for air travel. I think Alaska canceled most of its flights in and out of Anchorage today alone.

COLLINS: Yes, my uncle works there, believe it or not.

MARCIANO: Really?

COLLINS: Yes, he's an oil field operator. Isn't that wild?

MARCIANO: Well, let's get him on the horn.

COLLINS: Well, we would, except he's decided to go on vacation. Probably good timing...

MARCIANO: Isn't that convenient?

COLLINS: ... I would imagine. Yes, Uncle Wayne (ph). All right, well, we are going to be talking to somebody, Rob, so stick around for that. In fact, as you well know, it's erupted five times since early this morning. It's spewing plumes of 50,000 feet high or so. We're talking about, of course, Alaska's Mount Redoubt.

So, joining us right now to share some of his expertise on volcanos and seismic activity, Peter Cervelli. He's a geophysicist with the Alaska Volcano Observatory.

Good morning to you, Peter. First, let's just start by what the situation is. We've been telling people it's already gone off, if you will, five times.

PETER CERVELLI, GEOPHYSICIST, ALASKA VOLCANO OBSERVATORY: Yes, that's correct. Since last night at around 10:30 Alaska time, we've had five pretty energetic explosions that have put ash to 50,000 or 60,000 feet above sea level.

COLLINS: Wow. And just so you know, we are looking at some of the still pictures right now. And they are, I have to say beautiful, but I can't imagine from where you sit what that feels like or what you're actually seeing, if you're even able to look outside.

CERVELLI: Well, of course, it's still dark right now, and so what I'm looking at and I think you might be able to see it on the monitors behind me are data from our realtime geophysical instruments. We have instruments on the volcano that let us detect minute ground motions. And from those motions, we can infer what's going on. This morning, for example, we've seen signals that are very, very indicative of explosions, and, of course, that's been confirmed.

COLLINS: Yes, absolutely. We should mention to everybody, you talk about Alaska Standard Time. It's four hours earlier there, so about 6:45 in the morning now where you are. You know, this is obviously, Peter, I would imagine, pretty exciting for you, but put it in perspective for us. Anybody in danger? I mean how far away is Mount Redoubt from any type of civilization, if you will? CERVELLI: Sure. Redoubt is about 100 miles away from where I'm sitting. So, it really doesn't pose much of a threat to people on the ground. It primarily threatens air traffic. Volcanic ash and jet engines don't mix.

COLLINS: Yes.

CERVELLI: Volcanic ash can (INAUDIBLE) jet engine failure. So, really what's going on here now is a pretty major disruption to air traffic in and out of Anchorage.

COLLINS: Yes, absolutely. In fact, you know what, Peter, if you'll stick around just for a second, our meteorologist Rob Marciano is standing by, wants to ask you something in particular. Rob, go ahead.

MARCIANO: Well, just visually, Peter, we haven't got any pictures. Obviously, the sun's just now coming up there in a pretty remote area. People think of volcanos, they often think of, you know, lava being thrown into the ocean in Hawaii.

What can we expect to see besides just an eruption of ash into the atmosphere? Any sort of lahar flows from melting snow down the glacier valley? Any sort of lava coming out in a pyroclastic flow of any sort?

CERVELLI: Well, yes, as you say, we are not going to see any lava flows, although we definitely will be and we already have, we're pretty sure, volcanic mud flows, also called lahars. And they (INAUDIBLE) by heat the rising magma melting ice and snow glaciers at the top of the volcano. And then you get this flurry or this mixture that races down the steep valleys and can actually cause problems for anything that might be downstream.

MARCIANO: So, but we're not -- when you say explosions and here in the lower 48, we think of Mt. St. Helens back in 1980. That was certainly an explosion that blew out what looked to be the effects of a nuclear bomb across parts of southwest Washington, with trees down and basically life obliterated for several miles outside of the volcano. Is that the sort of activity or explosions that you think you will see once the sun comes up?

CERVELLI: No. It will not be nearly so energetic. I mean, the explosions that we've seen or that we've imaged, I would say, with geophysical data so far at Mount Redoubt have been energetic, but they're not even in the same league as Mt. St. Helens in May of 1980. To put it in comparison, you know, it's like the difference between a magnitude two earthquake and a magnitude five earthquake, or something like that.

MARCIANO: Excellent information. Thank you very much, Peter. We'll be eager to see the pictures as they come out of southern Alaska. Stay safe up there.

COLLINS: Yes, all right, Rob. And Peter, thank you, as well. We should mention, too, as we continue to look at some of those incredible still pictures of Mount Redoubt in Alaska, that Peter was able to come to us, made available to us through Skype, live from the volcano observatory. We'll keep our eye on this one for you, that's for sure.

Also want to mention very closely keeping our eye on Wall Street, too, because look at that. Dow Jones Industrial Average is what? Up about 260 points? We like the looks of that. So far, also S&P, Nasdaq up as well. We're watching the numbers in the CNN NEWSROOM.

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COLLINS: The government unveiled its massive plan to help the ailing banking sector. And that seems to be sparking a big rally on Wall Street. Look at those numbers. Susan Lisovicz at the New York Stock Exchange now with more details. Hi there, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Heidi. Well, let's saver the big board for a change.

COLLINS: Let's.

LISOVICZ: This is quite a difference from the last time Treasury Secretary Geithner announced a plan to help stabilize the banking sector. That was a month ago, and the Dow plummeted nearly 400 points. Today we have a huge rally, and the banking stocks are leading it sharply higher. Citi, Bank of America, J.P. Morgan, American Express, all up double digits. The government quite simply trying to take these toxic assets off banks' balance sheets. Those assets, of course, have led to severe losses and in some cases some failures.

Uncle Sam's hoping that it will lead to healthier banks. Healthier banks lend more. Banks that lend, well, consumers and corporations start to borrow, and you've got a recovery. If it works.

COLLINS: Yes, if it works.

LISOVICZ: Right now -- if it works. The Dow Industrials, the Nasdaq, the S&P 500, each up about 3.5 percent so far -- Heidi.

COLLINS: You know, the criticism last time around when Geithner came to unveil this was that there weren't really any details provided. I mean, he even wrote an op-ed in "The Wall Street Journal" now this time around. But do we have any idea really how much these toxic assets are worth?

LISOVICZ: Well, Heidi, that is a trillion-dollar question. We really...

COLLINS: Speaking of $1 trillion.

LISOVICZ: Yes, we really don't know. The banks do not want to sell their assets too low, and investors don't want to pay too much. That's why the government's coming in to take some of the risk, Heidi.

COLLINS: So then, the question has got to be, who's going to buy them? Who is going to pick them up?

LISOVICZ: The name of the program is the Public/Private Partnership. And the idea is to entice hedge funds, pension funds to create a marketplace that doesn't exist for these illiquid securities. Nobody wants then. Nobody knows how to price them. The government's going to buy them, and if it works, create a marketplace, create demand for them. We will be following that to see if it works.

COLLINS: Yes. Yes. All right, Susan, you've got the exciting spot to be in today. Thanks so much, Susan Lisovicz.

LISOVICZ: You're welcome.

COLLINS: Oil prices on the way back up. Gas prices steadily inching higher too.

(COMMERCIAL BREAK)

COLLINS: The Obama administration laying its plan on the table to save the banks in this country. The aim is to buy up at least $500 billion in those bad assets we've been talking about, like the subprime mortgages, which may default. Well, the plan would set aside $75 billion to $100 billion to get the ball rolling, and then the government would partner with private investors to buy the bad assets. It'll set up auctions with banks that need to get rid of them.

Money matters dominating President Obama's 63rd day in office. In a little less than half an hour, he gets his usual economic briefing. Then at 12:30, the president travels next door to the Eisenhower Executive Office Building. And there, he'll talk about investments in his budget proposal for clean energy and new technology. After he wraps that up, he's got a closed-door meeting with advisers.

Resign or be fired. One congressman's thoughts on Treasury Secretary Timothy Geithner. Next hour, we'll hear from Representative Connie Mack of Florida on that.

Low oil prices may be history. What does it mean for your wallet? CNNmoney.com's Poppy Harlow has our "Energy Fix" now from New York. Hi there, Poppy.

POPPY HARLOW, CNNMONEY.COM: Hey, Heidi. This was the one silver lining in this entire economic mess, low oil prices. Right now, we're seeing oil trading above $53 a barrel, Heidi. Last Thursday, we saw the biggest jump in crude prices since November. We have a chart pulling it up for you. This is last week's oil prices. So, you see the big jump, folks, right about there.

A couple of things going on Here. We heard the Fed last week announcing it's injecting $1 trillion into the economy. The value of the U.S. dollar dropped significantly on that news. And because oil's traded in dollars, oil prices pushed higher. They're continuing to go higher. Also OPEC, as you know, Heidi, has been cutting production since late last year, so the tighter supply really starting to weigh on prices here. The idea when the economy turns around, we could see oil prices spike right back up, Heidi.

COLLINS: Yes, well, we've also seen gas prices go up just a little bit so far, too.

HARLOW: That's exactly right. Gas prices jumped about a nickel in the past week. AAA saying the national average today about $1.96. We're still a far cry from $4 a gallon that we saw this summer. Right now, the government calling for about $2.02 a gallon for gas in August. But if oil prices spike, as we're seeing them do this week and what we saw last week, that's definitely going to change the picture, Heidi.

COLLINS: What about oil stocks? This be a good time to get in on that?

HARLOW: Yes, it's a great question. Who's thinking of investing at this point, right? Have we hit a bottom or not? When you look at oil stocks, this may be a time to do some bargain hunting. There are some money managers that think we're going to see oil top $150 a barrel in the next three to five years, believe it or not. Commodities, that can be a good way to diversify your portfolio.

Also, they can protect against long-term inflation down the road. Keep in mind, you may already have a bunch of oil stocks in your 401(k) or your IRA. If you want to up the ante a little bit, check out a commodity-based mutual fund. And look at this story: "Buy oil stocks now. Really." It's a great new piece on CNNmoney.com.

COLLINS: Yes, really, we're not kidding.

HARLOW: Jump in now if you've got the stomach for it, yes.

COLLINS: All right, Popppy Harlow, thanks so much.

COLLINS: I'm Heidi Collins. Join us again tomorrow morning beginning at 9:00 a.m. Eastern. For now, CNN NEWSROOM continues with T.J. Holmes.