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GM Has New Lineup of Fuel-Efficient Cars; Wisconsin Fifth- Graders Win Stock Contest; Gunman Hijacks School Bus; Spelling Bee Champ Fulfills Dream; Mother Angry over Son's Taser Death; Study Indicates Skewed Spending on Drug Fight
Aired May 29, 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: Here are some of the other stories we're watching right now. General Motors trying to get the ducks in a row before the expected bankruptcy filing next week. In fact, we just learned the board is meeting tonight and tomorrow to discuss their plans. Autoworkers also expected to complete their vote on new concessions. Workers at several plants have already approved the plan.
Britain's Prince Harry in New York today. The two-day tour is his first official trip to the United States. The prince will meet with relatives of 9/11 victims this afternoon. He'll also dedicate a memorial garden honoring British victims of the terror attacks. Later, some lighter affair. Prince Harry plans to take part in a charity polo match.
Tens of thousands of people line the streets of Seoul, South Korea this morning for the funeral procession of a former president. ** committed suicide six days ago. Riot police had to be called in to clear protestors out of the way. They blame the opposition party for his death. An investigation was recently launched into allegations the former president and his family took millions of dollars in bribes.
The U.S. is waging a new war fighting terror in cyber space. Take a look at these numbers now. According to the U.S. Department of Homeland Security, the number of cyber attacks on government and private networks had skyrocketed from 4,095 in 2005 to 72,065 just last year. This hour, we are taking on cyber security as President Obama prepares to announce a new position called cyber czar.
CNN White House correspondent Suzanne Malveaux live at the White House now with more details on the announcement.
Good morning, once again, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, Heidi. Well, one White House official reminded me this morning that there was a time before Barack Obama became president during the came, where his own cell phone was tapped into. It was a breech of a computer network; that this can happen to anybody. And, really, this computer systems, whether they are private or public, they control whether or not, the planes or landing, or the traffic lights are going off. All these kinds of things -- So, obviously, it's a priority of the administration. There was a 60-day review and essentially the president's going to say we need somebody in the White House to coordinate with what all of these different agencies are doing when it comes to cyber security. Homeland Security, NSA, intelligence, one person in the White House who will go ahead and try to make sure that everybody is talking to one another. So that really is what the announcement is going to be about in the next hour. So you had mentioned those statistics, obviously, cyber attacks on the rise dramatically.
Also the director of National Intelligence Dennis Blair saying that the biggest concern about cyber attacks is coming from nation states like Russia and China. That there's a lot of evidence that they have hacked into the U.S. system -- computer systems, and that's another priority that they really have to watch that very closely. This is an individual who is going to try to make sure that all of this is coordinated and comes into the White House in one place, Heidi.
COLLINS: All right. We're watching closely, Suzanne Malveaux, at the White House for us this morning. Thank you, Suzanne.
Security experts warn there is no government or private computer or network immune to cyber attack. As one official put it, we're all at risk. CNN's Kitty Pilgrim reports one of America's biggest threats comes from China.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Most computers in this country are vulnerable to attack. Government computers, computerized infrastructure systems, transportation, communication, even things like water supply and ATMs. The worry is hostile attack. With Dale Meyerrose former chief information office for the nation's top intelligence official called "cyber fry." He says most U.S. computer systems are just not secure.
DALE MEYERROSE, FMR. CIO, U.S. INTELLIGENCE COMMUNITY: We're always at risk. And every system is at risk to some degree. 85 percent of the critical infrastructure in the United States is in private hands. And often times the business cases made based upon buying the least expensive, most available software.
PILGRIM: For its own defense, China has developed new operating software disclosed during a recent hearing in Congress. This software is being installed in China's government and military systems to harden its key military servers against attack. The Pentagon says China is making steady progress in efforts to hack information from U.S. industrial and government computer systems. China denies cyber spying, but Pentagon officials say they have millions of hacks a day, many suspected from China.
James Carafano of the Conservative Heritage Foundation says the new Chinese defenses are to be expected. And our government must get up to speed.
JAMES CARAFANO, HERITAGE FOUNDATION: Everybody's doing this to everybody. And everybody knows everybody's doing this to everybody. So governments are out there not only looking at how to protect their own systems, but they're looking at how to exploit information from other governments.
PILGRIM: The Pentagon is requesting a budget for increasing the staff from 80 cyber experts to 250 by 2011. Kitty Pilgrim, CNN.
(END VIDEOTAPE)
COLLINS: Let's get a little more insight now on cyber attacks and what can be done to protect our computer systems. Greg Garcia is the former assistant secretary for cyber security with the Department of Homeland Security. He's joining us now live from Washington. Thanks for being with us, Greg. You just heard about the threats from China. Can you expand on that a little bit? What are your thoughts?
GREGORY GARCIA, FMR. ASST. SECRETARY OF DHS: Well, this really is the new warfare of the 21st century. And it's happening not just from abroad, but it's happening within our borders, as well. Anything from massive exfiltrations of data from government networks, to massive theft of consumer credit card numbers from retailers, to attacks on our critical infrastructure, like the electric grid or water purification, chemical manufacturing.
All of our networks are vulnerable. And the new White House cyber czar is going to have a full job to raise awareness across the country that it is everybody's responsibility to protect themselves.
COLLINS: Yes. So what do you think about the creation of this position? I mean, is there any one person who could actually do something about some of the vulnerabilities that you just mentioned?
GARCIA: Well, certainly governing in Washington is a bit of an art.
COLLINS: I think that's a way to put it.
GARCIA: The end result could look like a Jackson Pollock painting or a Mona Lisa. It depends on the credibility and the competency of the person in charge. This is a person who is going to have to have senior government experience, it's going to have to have executive business experience, it's going to have to be somebody who is skilled in diplomacy. Because this is an issue on the international stage now.
And I think the most important responsibility is as we heard earlier to coordinate all of the various moving pieces within the federal government to ensure that each agency that has responsibility is aligned toward unity of purpose.
COLLINS: Well, yes, and that seems like it would be at least step number one in coming into this position, right? Because obviously there are many different facets here, many different departments. Does each one of them right now have their own sort of cyber experts, if you will? GARCIA: Yes, they do. And they have different authorities. If you're talking about the Defense Department that has the responsibility to protect the .mil domain, the military network -
COLLINS: Right.
GARCIA: Or the intelligence community that does surveillance. The Homeland Security department that does outreach to the private sector, to state governments. This has been going on for a long time. Since 2003, we've had a national strategy to secure cyber space. So this is not new substantively -
COLLINS: Sure.
GARCIA: But it's good that the Obama administration is putting a real punctuation point on the importance of this issue. And I would also say, Heidi, step two is to work with the Congress. There are many congressional committees that are now waking up to this issue and they want to take leadership on this, and each of those committees is responsible for a different federal agency. If there's infighting on Capitol Hill among the committees about who's in charge, there's going to be infighting down in the federal agencies about who is in charge.
The congressional leadership needs to get their committees aligned and determine what is best for Congress to do to fill the gaps in our policy framework.
COLLINS: All right. Very good. We'll be watching closely the announcement and then who is going to get the job. Thanks so much. Greg Garcia, the former assistance secretary for cyber security with the Department of Homeland Security. Appreciate it, Greg.
GARCIA: Thank you.
COLLINS: We're going to get details about the president's new cyber security plan a little later this hour when he makes that announcement. Going to come your way at 10:55 a.m. Eastern. And of course, we'll bring it to you live when it happens.
North Korea fired off another missile this morning and they may not be done just yet. Today's short-range missile test is their sixth this week. But now we're hearing North Korea may be setting it sights a little higher. CNN Pentagon correspondent Barbara Starr joining us now, live this morning. So Barbara, what do we know about a possible long-range launch?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Heidi, good morning to you. Two U.S. defense department officials tell CNN that in the last 48 hours U.S. spy satellites have seen activity at a long range ballistic missile facility in North Korea about 14 kilometers north of the capital of Pyongyang. Here's what's concerning, the missile activity that they see is vehicles moving around on the ground. The type of vehicle patterns of activity that have been seen previously before prior long range missile launches.
This is not to say that they're getting ready to launch, but they are moving a lot of stuff around and they sure are making it look like that. So what the U.S. has to figure out, is this for real? Are they getting ready for another launch, or are the North Koreans who know U.S. satellites fly overhead moving this stuff around basically to mess with Washington's head, if you will. It's going to take some time to figure all of that out. But in the meantime, it's still very concerning given everything we've seen this week.
COLLINS: Yes, when you put it all together. Absolutely. All right. Barbara Starr for us, our Pentagon correspondent on the story of North Korea today. Thank you, Barbara.
STARR: Sure.
COLLINS: Heading over to the severe weather center now, and Reynolds Wolf is standing by looking ahead to the weekend. Because that's what everybody wants to know but we have a few trouble spots to talk about.
REYNOLDS WOLF, CNN METEOROLOGIST: We do have a few trouble spots. We've been talking about tropical depression, which continues to march on to the Atlantic. Really, not going to be much more of a threat for us before long. It continues to weaken as it moves a bit more to the east northeast. That is some good news. The bad news is that we could see some more rough weather really begin to mount up in parts of the eastern sea board.
I mean take a look, Heidi, from Philadelphia from New York, southwards to say, we could see some strong storms. Same story for you, though, in parts of the midwest, especially into the late afternoon hours. Could do with a rumble of thunder. Maybe a slight risk of tornadoes. And as we get into Saturday, same deal, but mainly for the Ohio Valley. The frontal boundary that's going to be making its way into portions of the Ohio Valley, interacting with a lot of that moisture that's been feeding from the gulf. So again, afternoon variety of storms you could be dealing with as far north as Michigan.
Maybe even into the upper peninsula but as we go from Saturday and then make that transition to Sunday, we're going to go back towards the arrowhead of Minnesota, southward into the corn belt and even into parts of the central plains. We could see some severe storms, mainly between the hours of 3:00 and 6:00 into the afternoon. And it's going to be the potential of strong thunderstorms, damaging winds, large hail, deadly lightning and maybe even some flash flooding in a few spots. Low-lying areas with poor draining usually susceptible. So we could have a mess there this weekend. That is the latest, Heidi. Let's send it back to you.
COLLINS: My family's not going to be happy with you, you know.
WOLF: You know, we do what we can. There are a lot of people that are not happy with me. It does happen. You know, it's what happens when you're a weather guy.
COLLINS: I know. I know. All right. Everybody need to be careful, obviously. Reynolds Wolf, thank you.
WOLF: You bet.
COLLINS: General Motors at the crossroads. What does bankruptcy mean if you own a GM car?
(COMMERCIAL BREAK)
COLLINS: General Motors at the crossroads today. Key decisions will shape how the car maker goes into bankruptcy and maybe how it comes out. Just a few minutes ago, we learned the GM board is meeting tonight and tomorrow to discuss bankruptcy plans. Now the focus becomes cutting costs and coming out of the bankruptcy leaner and stronger.
Along those lines today GM is expected to announce the fate of the Hummer, the massive SUV saw its sales plunge because of rising gas prices. Also today, the company's union workers will finish voting on a modified contract cutting their own benefits now could make the company stronger down the road.
And we'll look ahead to Monday's government deadline, which of the company's 14 plants will actually shut down. GM's bankruptcy would ripple from the board room to the showroom. What exactly does it mean to you as a taxpayer and as a consumer? Here to walk us through it all, Peter Valdes-Dapena, who is a writer, long time covered the automotive industry for CNNMoney.com.
Peter, thanks for being with us this morning. I guess that is the question everybody wants to know what exactly does it mean for me if I'm at home watching this news today?
PETER VALDES-DAPENA, SR. WRITER, CNNMONEY.COM: Right. Well, there are a couple of ways that it could mean something for you. One way is as a taxpayer. Obviously a lot of your money is going to be going into this company. And you as a taxpayer, you may have been a GM stockholder before, but we're all going to be GM stockholders now.
COLLINS: Right.
VALDES-DAPENA: We're going to own almost 3/4 of this company when this is all through, through the Treasury Department. And that means we're going to want this company to succeed. It also means and I have to wonder what this is going to mean in the future for General Motors decision making. Are there going to be political pressures if GM wants to lay people off.
COLLINS: Sure.
VALDES-DAPENA: Or make a large SUV. Are people going to be saying, wait a minute, that's our car company making that big SUV. Do we want them to do that?
COLLINS: Yes. I don't know how there could not be. In fact, one of the stories this morning also talked about GM being on a crash diet to get in shape for chapter 11. Is that a pretty good comparison, you think? VALDES-DAPENA: Well, they're not so much on a crash diet to prepare for Chapter 11, I think they'd be in an up down crash diet, whether they're going to Chapter 11 or not, they would be because they're trying to restructure, make this company smaller and more competitive.
We just spoke about the fact that they're going to be selling off the Hummer brand -
COLLINS: Yes.
VALDES-DAPENA: Which is a brand not only not selling well for GM but quite frankly, creating some image problems for that company as they try to look like a 21st century company interested in fuel economy.
COLLINS: Yes,
VALDES-DAPENA: They're also getting rid of other brands like Pontiac and Saturn. So yes, they're trying to lean down. Right now, General Motors has nothing like the market share that it used to have in its heyday but it's never had the opportunity to trim down the way it needs to become a smaller company to deal with the smaller market share that it now has.
COLLINS: Well, talk a little bit more about that. Explain what a structured GM might eventually look like. Because we've heard already this morning this notion that's out there. You know, would it be government motors or will it actually remain General Motors?
VALDES-DAPENA: Well, of course, I think -- I think it will have a chunk of it (VIDEO GAP), the government said they had no interest in running the company. I imagine that the Treasury Department will probably try to when it reasonably can get GM and get out of the awkward position of owning a car company. I don't think they really want to do that.
In terms of what consumers are going to see, you will definitely be seeing a leaner GM, you'll be seeing fewer brands, you'll be seeing less repetition of cars. You won't see Pontiac cars that look virtually the same as Chevrolets that's sold across the street. And some recent signs from GM, some of their newer products are better cars, they've certainly shown they're capable of making some excellent products.
So we hope that in the future we'll see more better, stronger, more fuel-efficient cars like the good stuff that GM's been doing the last couple of years. Less of the stuff like they did back in the '80s that really gave the company a bad name.
COLLINS: Yes. Well, all right. Everybody's watching closely as you would imaging. Peter Valdes-Dapena, thanks so much from CNNMoney.com. Appreciate your insights today.
This could also be a critical day in bankruptcy court for Chrysler. A third day of testimony underway. And a judge could rule today on the company's sales to Italian car maker, Fiat. Some debt holders oppose the sale, though and say they are going to appeal any court approval of it. The clock is ticking. On June 15th Fiat can actually walk away from its offer if the deal is still in limbo.
CNN tonight, Ali Velshi and Christine Romans explore the past, present and future of U.S. carmakers, "How the Wheels Came Off, the rise and fall of the American auto industry," CNN tonight, 8:00 p.m. Eastern.
Take a moment to check out the big board for you today on a Friday, ending the week, obviously. And we are looking right now to the positive by double digits. About 20 points up or so. Dow Jones industrial average is resting at 8,422 for the time being. We'll continue to watch those numbers.
Also they've doubled their investment and won a trip to Wall Street. OK. They weren't really playing with real money, but who cares. Today some fifth graders are on a real road trip. And we are talking to them.
And looking for health insurance? Well, you better do your research. There are scammers out there that are looking to rob you blind. What to do if you fall victim.
(COMMERCIAL BREAK)
COLLINS: Health insurance scams, they look like real policies, but aren't worth the paper they're written on. So what should you do if you fall for one? That question is the focus. Today's "Empower me Friday" when we answer your e-mails on how to become an empowered patient.
CNN 's senior medical correspondent Elizabeth Cohen heard from someone who got scammed unfortunately.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Yes.
COLLINS: So take a look at this question that we got now. Meredith said this "my mother bought me a health policy. About four months ago I was in the hospital. The company told me the hospital was in the network and it was not. It turned out to be a scam. I ran up a bill, a $75,000, of which I have not paid." So what happened here?
COHEN: What happened here is she got scammed. So this woman's mother buys her a health insurance policy, she pays for what she thought was, she pays the premiums month after month. She was told that all these hospitals and doctors who are in the network. This woman then went to the hospital and to doctors and they're like, huh, what, never heard of these people. Never heard of these people.
So I called some folks at the Coalition Against Insurance Fraud. And I said is this unusual? And they said no, I wish they were. They said these scams are growing like (inaudible) because of the recession. So a lot of people getting laid off and losing their health insurance, they're desperate and they sort of take anything. COLLINS: So how do you know? I mean, I guess I wouldn't really be in the practice myself if I was changing insurance companies and then calling arbitrary hospitals or doctors and saying, hey, do you take this particular health insurance, or is that what you need to do?
COHEN: That is one thing you can do. But there are also some red flags to look for, which makes it a lot easier. There are certain things that these companies say to sort of reel you in. If they say they give discount benefits, that's a phrase that should tell you something's not right here.
Health insurance doesn't give you discount benefits, they give you health insurance which is something very different. Also if they use the word indemnity, that's a red flag according to the folks at Consumer Reports. Also if they say that they only give limited benefits, the word limited's not good. You don't want the word limited That's not a good sign either.
And here's the final one you want to look for. If the alleged health insurance says that they give five to 30 percent off. You know, something in that whatever range like a percentage off, that doesn't mean anything. Five percent to 30 percent off of what?
COLLINS: Yes.
COHEN: Off of what?
COLLINS: Right.
COHEN: So what they're telling you, they claim to be giving you a discount card, but in the end it may mean nothing.
COLLINS: Yes, but it's interesting those word choices, I mean, I don't know if I would really see a red flag if I see limited benefits. Because in never think you're going to get everything.
COHEN: That's true but that's just one of them. When you hear discounts, discount is another word to look for. That's often a big red flag. But you know, what you suggested is a great idea. If they say Dr. John Smith is on our plan, call Dr. John Smith and see if you've heard of these people.
COLLINS: Yes, yes, very good.
All right. Well, obviously, this segment we get a lot of e- mails. And so far you've been able to help people get insurance, lower their drug bills. If people want to get in touch with you, how -
COHEN: They can. They just need to e-mail me at empowerpatient@cnn.com. We love helping people on empower me Friday. So send me your problems and I'll see what I can do.
COLLINS: All right. Very good. Thanks so much, Elizabeth Cohen. Appreciate that. Lots of questions this morning about General Motors, too. Including its plans for its fuel-efficient vehicles. We're checking out the inventory in just a moment.
(COMMERCIAL BREAK)
ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.
COLLINS: Hi, everybody, here's a look at a few of the stories that we're working on in the CNN NEWSROOM this morning. Missing for more than 60 years. A long hand-written letter from President Abraham Lincoln actually turns up. An Arizona collector had it and handed it over to the federal government. We'll take a look at that.
And also, he didn't aspire to be the prom king. But in Los Angeles, an openly gay student actually set out on a quest to get the crown and won. We'll tell you that story.
And of all places, someone a winner. In South Dakota, and it's a winner of a $232 million Power Ball jackpot. I can't even say it. We'll bring you that story in just a moment.
General Motors though scrambling to get its house in order before filing for bankruptcy. Last hour we learned that GM's board will meet tonight and tomorrow to discuss bankruptcy plans.
The formal filing now expected on Monday. The new goal come out of the process leaner and stronger and as quickly as possible. Today, GM's union workers are wrapping up their voting and revising their contracts. They're being asked to cut benefits to save company money.
Also, today, GM expected to announce whether it will eliminate the Hummer brand. The massive SUV saw its sales plummet when gas prices began to rise.
The auto industry under pressure to build more fuel-efficient vehicles, but would a GM bankruptcy derail those plans? Cnnmoney.com's Poppy Harlow has our energy picks now from New York this morning. Hi there, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hi there, Heidi. GM has aggressive plans going forward. Right now, the company boasts, listen, we've got the most models out there on the road that get 30 miles per gallon or more. We've talked to a GM spokesman. He said whether the company restructures inside bankruptcy court or outside of it, they're going to continue with that viability plan, they're going to focus on what you've heard them say for a while now. Those four core brands of Chevy, Cadillac, Buick, and GMC. They're committed, the spokesman say to these fuel-efficient cars and trucks. Also meeting those new cafe standards, those new efficiency standards that were just announced.
And we asked about prices. What is this going to mean for the price of the consumer if they want to buy an energy-efficient GM car. They said that's going to be driven by supply and demand. The bankruptcy if we see one is not going to affect the price you pay, he even said you could benefit at least in the near term by trying to get rid of those, even the fuel efficient 2009 models.
But Heidi, analysts say in the long-term here, with a bankruptcy, with fewer dealers out there, you're going to see higher prices, especially on these fuel-efficient models, Heidi.
COLLINS: Yes. Well, how fuel-efficient is GM's line up and what are we talking about here?
HARLOW: It's interesting because as I said, they both, if they have the most fuel-efficient models on the road but of those 20 models to get 30 miles per gallon or more on the highway, 12 of them are Saturns and Pontiacs, Heidi.
And we know that GM is getting rid of the Pontiac brand by the end of the year. Saturn is on the chopping block. It's up for sale. If a buyer doesn't emerge, that could also disappear.
So, you're talking about eliminating more than half of those fuel-efficient models. Here are ones that you'll see. Let's take a look here. That's the Chevy Cobalt. It gets 33 miles per gallon on the highway. It's relatively inexpensive. A new one is under $16,000.
Next spring, what you're going to see is that, the Chevy Cruze. That's going to replace the Cobalt. That could get 40 miles per gallon. No price tag on that one yet, Heidi.
But here's the issue for GM. Small cars aren't as profitable for the company as a Hummer, for example. It could be bad for business. Those summer profit margins when you compare what you're going to make on a fuel-efficient car versus a Hummer.
It's going to be tough, because people want to pay more for more car. It's harder to convince them to do so for a smaller car. That could be a big issue for GM ahead.
COLLINS: Yes. Exactly. Well, what about the electric hybrid that we heard a lot about? The Chevy Volt. Is that going to be affected by the bankruptcy -- or potential bankruptcy?
HARLOW: According to GM, absolutely not, saying they're still committed to getting the Volt out there in November of 2010. Analysts say, though, listen, this is not expected to be a big seller. Right, the rumored price tag is about $40,000. GM hasn't confirmed that.
But if that's true, it's pretty expensive. And they could lose money on this in the beginning, which is not good for a company, especially if it falls into bankruptcy.
The thing here, Heidi, is what we saw with Toyota and with the Prius. The Volt could be a statement that even in tough times, GM is willing to invest in cars of the future. That could be a savior in the end, the mindset that people have, changing their perception about General Motors, Heidi.
And just before we go here, I want to talk about tonight, the special. You see it right there. "HOW THE WHEELS CAME OFF, THE RISE AND FALL OF THE AMERICAN AUTO INDUSTRY," tonight on CNN. I took a camera across the country, talked to people about the automakers, towns like Janesville, Wisconsin, where a huge GM plant closed. We'll show you that in the special tonight. Heidi.
COLLINS: All right, very good. We'll be looking forward to that. Poppy Harlow, thank you.
HARLOW: Sure.
COLLINS: So, are you smarter than a fifth-grader? You may think so, but you haven't met four special fifth-graders from Wisconsin. They won a statewide stock market contest by taking 100,000 hypothetical dollars and turning them into more than $200,000. Susan Lisovicz is on the floor of the New York Stock Exchange with the winners and her new friends. Hi there, Susan. Hi, everybody.
SUSAN LISOVICZ, CNN CORRESPONDENT: Four new friends, yes. Heidi, I'm standing next to my four new financial advisers.
COLLINS: Love it.
LISOVICZ: Don't let their age fool you. These 10- and 11-year- olds from Tuller Elementary School in Neenah, Wisconsin beat out 1,500 other teams. And most of them were high school kids. All of America, of course, wants to know their strategy. Because they started investing in February as the market was tanking. Even a lot of the pros were scared. They were on the sidelines. These girls saw an opportunity. Bailey, what did you buy?
BAILEY MORTON, STUDENT: We bought a lot of financial stocks. We bought M&I Bank, Bank Mutual, Wells Fargo...
LISOVICZ: OK, financials, but you know, a lot of people were frightened about financials because some financial companies were closing their doors. They were going out of business. Why did you go in?
MORTON: Because we thought we could take a risk on financial stocks and see if they went up and see if we could make a lot of money.
LISOVICZ: And Jen, 15 stocks in all. They were all financial companies. Not all financial companies were created equal. How did you pick one from the other? What made you decide to go for some of them?
JEN SAGEHORN, STUDENT: Well, we looked on Yahoo Finance, and we saw that some of the stocks were doing good. So, we thought that we should long them and see if we could make money.
LISOVICZ: They're longing them. Longing them. They've got the jargon down. So Sam, Yahoo Finance. I mean, is that where you did most of your research? Where else were you going?
SAM WEILER, STUDENT: Well, we mostly going to Yahoo because what was where we could look up stocks to see if they're going up or down.
LISOVICZ: And finally, Annie, you know, a lot of people say, OK, you can buy on the dip, you buy things that are cheap. But you also buy what you know. Why aren't you buying Coke and Disney and Abercrombie. Why did you go with financial? You don't really know financial companies, did you?
ANNIE CZECH, STUDENT: No, we were just doing -- because we heard that they were going to do really good from somebody else who had won in the past.
LISOVICZ: Oh. Who was that? Was that some...
COLLINS: Hey, is that insider trading? I don't know.
CZECH: No, I think it was a high schooler.
LISOVICZ: OK, well, the insider trading might be this gentleman behind me, Tim Hopfensperger, who is the fifth-grade math teacher. His team of fifth-graders last year, Heidi, also placed first of about 1,500 teams.
So, you were their adviser, but they didn't have to follow your advice. What did you tell them? And what should you tell America, frankly?
TIM HOPFENSPERGER, FIFTH GRADE MATH TEACHER: Well, basically, what I told the kids, and I'm working with wonderful young people, is that I told them I'm going to be their broker as we use this game, and I gave them a lot of advice, but they really had to do the research on their own. And these kids really went to town. They looked on the Internet, they looked through newspapers, and ultimately it was their choice on what they looked at.
LISOVICZ: They were looking at the calendars, Heidi. This is really interesting. They were looking to see when the earnings reports were coming out because they thought, oh, you buy on the rumors, sell on the news. They got sharp really quick.
HOPFENSPERGER: They really did. They made a lot of money really quickly. Obviously, we talk about try to get stocks on sale, which means they're really down. And they did make quite a bit of money, and then they sold.
LISOVICZ: Hypothetical money.
HOPFENSPERGER: Absolutely. I wish it was my portfolio.
LISOVICZ: Congratulations and good luck. His team's at Tuller Elementary School, Heidi, also placed second and fourth in the statewide stock-picking contest. I think Tim has got an alternate future, you know what I'm saying.
COLLINS: Yes, yes, absolutely, and the girls, too. I think I'm detecting at least a couple of redheads in that whole bunch. LISOVICZ: That's right! I think we -- yes, I think there's a lot of savvy among redheads. And, Heidi, by the way, it's all of their first trip to New York City. Their favorite part out of Central Park, Times Square, Broadway...
COLLINS: Right.
LISOVICZ: ... the hotel.
COLLINS: Of course. Love that. All right. Susan, thanks so much. And thanks to all the girls as well. Congratulations to them.
Meanwhile, credit card reform, it's finally happening. And you probably have a lot of questions about how the changes will affect you. CNN's personal finance editor, Gerri Willis, taking your questions coming up next hour.
It all came down to one word to clinch the title. Meet the new spelling bee champ, Kavya Shivashankar. She's joining us live in just a couple of minutes.
(COMMERCIAL BREAK)
COLLINS: Very quickly, want to give you information we're getting into CNN now. Talking about Riverdale, Illinois. Bear with me as I go through this. We are understanding that, according to our affiliates there, that a gunman actually hijacked a school bus in south suburban Riverdale, then led police on a chase. Important to point out to you that there were no children on the school bus.
But in this chase, apparently the school bus hit at least one police car and several other vehicles before he was shot. There was an exchange of gunfire there. Once again, according to WGN, one of our affiliates there in the Chicago area. The school bus, again, not carrying any children, but there were people apparently injured in the cars that the bus hit.
We don't have any details right now on the injuries, but we, of course, are following this story very closely. Apparently, it happened around 8:00 a.m. local time. So, once again, we will continue to follow this story for you out of Riverdale, Illinois. We're back in a moment right here in the CNN newsroom.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
KAVYA SHIVASHANKAR, 2009 SCRIPPS NATIONAL SPELLING BEE WINNER: Laodicean. L-a-o-d-i-c-e-a-n. Laodicean.
UNIDENTIFIED MALE: We have a champion.
(END VIDEO CLIP)
COLLINS: Yee haw! Laodicean. A word 13-year-old Kavya Shivashankar will probably never forget. And the word that earned her $40,000 in cash and prizes in the Scripps National Spelling Bee. The spelling bee queen herself, Kavya, joining us now live from Washington.
So, Kavya, obviously, congratulations are in order. How are you feeling this morning?
SHIVASHANKAR: I'm feeling pretty excited. But I am a little tired.
COLLINS: I can only imagine. Did you sleep at all last night?
SHIVASHANKAR: Like, I think, about three or four hours.
COLLINS: But then you had to get up early because why? Everybody wants to talk to you, right?
SHIVASHANKAR: Yes, I had a lot of interviews this morning.
COLLINS: You did? Hey, we know that this was your fourth time in the spelling bee, and you finished in the top ten every single time. Did you have a feeling at some point, though, last night that you might actually be able to win the thing?
SHIVASHANKAR: Well, I've always thought about that. Because this has been my dream for so long. I've always wanted to win the bee. And I was just really excited when I was able to go up and spell the last word.
COLLINS: I'm so glad for you. And you know what? We watched really intently because, you know, yesterday we had the host, Tom Bergeron, on the show, as well. And we talked a lot with him about how you focus as a young person up there with all of the cameras and the pressure. What does it feel like? Is there any way to put it into words with how you cope?
SHIVASHANKAR: Well, I just try to focus on my word and the -- when I'm up there just to try to get my word right. And I try not -- I focus so much on my word, I don't really pay attention to all of the cameras and photographers. All the media in front of me.
COLLINS: And, in fact, I remember seeing the profile they did about you, your technique. Because if I remember correctly, I think it was your dad that said she'll never ask for the word to be used in a sentence. Why is that?
SHIVASHANKAR: I don't know. I just never found that useful. I don't get any information from it. So...
COLLINS: And they were really funny this time around.
SHIVASHANKAR: Yes, they were very funny. I think that kind of made it easier to stay calm because you got a laugh once in a while.
COLLINS: Yes, I think it was entertaining. That was a good idea. So talk to me about your role model. Because I think she was a 1999 spelling bee winner, right? Nupur Lala. SHIVASHANKAR: Yes.
COLLINS: Tell us why. How did she inspire you?
SHIVASHANKAR: Well, first of all, she's in the documentary "Spellbound." And when I first watched it when she was the winner, I was really impressed and inspired by her focus and determination and how she was able to win. And I've always looked up to her.
COLLINS: And her energy level, too, watching her jump around on the stage when she won. You know who else I liked in your family story? Your little sister. She is a spark plug. Do you think she's going to be on the National Spelling Bee one day?
SHIVASHANKAR: I think so. She seems pretty interested. I hope she'll be able to come here and do well. And I would like to help her out if she is. My dad's the main coach, but I would definitely like to help her out if she would.
COLLINS: Yes, I think you might have a little bit to offer in that department. Now, listen, I know you want to be a neurosurgeon. You also play violin. Are you going to keep up with the spelling bees? Or do you think you'll retire from this?
SHIVASHANKAR: There's nothing else I can do for a spelling bee. I can't compete anymore. I'm really going to miss spelling. I mean, it was such a big part of my life, and I love doing it. But as I said, if my sister gets to D.C. sometime soon, I'd really love to help and coach her.
COLLINS: Well, good. Listen, the neurosurgeon thing, maybe I'll hook you up with my friend, Dr. Sanjay Gupta. He might be able to direct you a little bit. I don't know if you'll need it.
All right, Kavya Shivashankar, thanks so much and congratulations to you. Have fun with it. I know you have a lot more interviews to do, too.
SHIVASHANKAR: Thank you.
COLLINS: And we are talking about the spelling bee on my blog. Just go to CNN.com/newsroom and click on my name. Want to hear your thoughts.
To this story now. A teenager dies after being Tasered by police. Officers insist their actions were justified. The teen's mother calls it a clear case of murder.
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GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: We want to get you answers to your financial questions. Let's get straight to "The Help Desk." Beth Kobliner is the author of "Get a Financial Life," and John Simons is the senior personal finance editor of "Black Enterprise" magazine. OK, guys, let's get down to it. Frank in Arizona asks, "We are in deferment on our mortgage, which ends June 1. We modified our loan in September, and I lost my job in January. We're hoping to modify our loan again with our current lender, we owe $650,000 on our home, it's worth" -- get this, guys -- "$258,000. What are our options?"
John, this is a tough situation. My heart goes out to them.
JOHN SIMONS, FINANCE EDITOR, "BLACK ENTERPRISE" MAGAZINE: It really is. It sounds like this guy is the perfect candidate for making home affordable programs that are being run by the federal government right now. What this guy should do immediately is go to makinghomeaffordable.gov where they will help you, walk you through the process, and make sure that you're eligible for a modification done by -- your loan has to be underwritten by Fannie Mae or Freddie Mac, but you can -- there are options for this person.
WILLIS: And can I tell you they have great applets, great worksheets on that Web site. It'll help you figure out how to use it.
Our next e-mail: "I would like to start an education fund for my 20-month-old daughter, but don't know the best way. What's the rule of thumb on how much I should set money aside for her?"
How much? Beth, how much should you save, and, you know, thank goodness she's asking the question, right?
BETH KOBLINER, AUTHOR, "GET A FINANCIAL LIFE": It's a great question. She has a 20-month-year-old, but if I told her the number, she would just chuck it all and have her kids never go to school again.
The typical private school on average costs $26,000 for tuition. Public schools are $7,000 for tuition.
WILLIS: Ouch.
KOBLINIER: It's so expensive. My advice is let's not worry about the number right now. Let's max out of what she has. If you have a 401(k) with matching, max out of it. If you have a Roth IRA, if you're eligible, if you're a couple earning under $166,000, max out of it. Because you can't borrow for retirement. You can borrow for college.
WILLIS: And just to mention savingforcollege.com. Great Web site to go to. "The Help Desk" is all about getting you answers. Send me an e-mail to gerri@CNN.com or log on to CNN.com/helpdesk to see more of our financial solutions. And the Help Desk, well, it's everywhere. Make sure to check out the latest issue of Money Magazine on newsstands now.
(COMMERCIAL BREAK)
COLLINS: A Michigan mother is outraged over the death of her 16- year-old learning-disabled son. The teenager died last month after being Tasered by police. Abbie Boudreau with CNN's special investigations unit has the story.
(BEGIN VIDEOTAPE)
ABBIE BOUDREAU, CNN INVESTIGATIVE UNIT CORRESPONDENT: So, this is where it happened.
(voice-over): What happened inside this house has changed Renae Mitchell's life forever.
RENEA MITCHELL, MOTHER: I'm actually still in shock. (INAUDIBLE), just to know he's not coming home. They do what they done. They killed him. They (INAUDIBLE) a Taser?
BOUDREAU: This is where Robert Mitchell spent the final moments of his short life. The 16-year-old died after police in this Detroit suburb shot him once with a Taser gun, giving him a 50,000-volt shock of electricity. Mitchell was chased here as he ran from several policemen after a traffic stop. Renea Mitchell is Robert's mother.
MITCHELL: Why would you want to shoot anybody's kid? Those things should not be used on people's kids.
BOUDREAU: Last month, Robert Mitchell was riding in a car here on Detroit's 8 Mile Road, immortalized by rapper Eminem.
(MUSIC PLAYING)
BOUDREAU: The car Mitchell was riding in was driven by his cousin, Chris Davis. But the car they were in had an expired license plate. Police came up behind them, turned on their flashing lights and began to pull them over.
Before the car even stopped, Mitchell jumped out and ran.
CHRIS DAVIS, COUSIN: He jumped out and started running. I told him not to, but he was real scared. He was petrified. He hopped out of the car and started running.
BOUDREAU: Mitchell wasn't wanted for any crime and had no criminal record, but he did have a learning disability. And his mother believes he ran because he was afraid of police.
Officers ran after Mitchell for nearly two blocks, ending up on this street where Mitchell ran into this abandoned house. Police say there, inside, Mitchell resisted arrest.
WILLIAM DWYER, COMMISSIONER, WARREN, MICHIGAN, POLICE DEPARTMENT: Once he entered into the vacant home, then they had to finally make a decision because of resisting arrest. They used their Taser.
BOUDREAU (on camera): The police officers would not have used the Taser if he wasn't resisting arrest?
DWYER: Absolutely. I mean, if he would have -- you know, they ordered him several times, you know, that he was, you know, not to resist. And he continued to resist. BOUDREAU: But this kid was, you know, a smaller kid, 5-2, 110, 115 pounds. Why couldn't they just overpower him? He was a small teenage boy. No weapon on him.
DWYER: Well, you know, the public sometimes doesn't understand that, you know, officers make split-second decisions. They don't have time to group up and say, "Well, here's the strategy we're going to use in this particular case."
BOUDREAU: Police consider Tasers a nonlethal use of force, though Amnesty International recently reported that more than 350 people have been killed by Tasers since 2001 in the U.S.
That now includes Robert Mitchell. His mother is still trying to make sense out of her son's death.
MITCHELL: Shooting a kid with a Taser is not an accident because Tasers don't have their own brain. The trigger cannot move unless somebody pulls it.
BOUDREAU (on camera): So, what would you call it, then?
MITCHELL: Murder. It's murder. Why did they use a Taser on a kid that hadn't did anything? Why?
BOUDREAU (voice-over): Robert Mitchell was buried a week after his death. The Mitchell family is now suing the Warren police force and also the City of Warren. An investigation by the police internal affairs department determined the use of the Taser was justified. And the officers involved are now back at work.
MITCHELL: My son is in heaven. I'm mad now. Ain't no time to be crying and (INAUDIBLE). I'm mad. Something needs to be done, and somebody needs to take care of it. They shouldn't be working right now. They done killed somebody's kid. And not anybody's kid. They killed my kid.
BOUDREAU: Abbie Boudreau, CNN, Warren, Michigan.
(END VIDEOTAPE)
COLLINS: And you are looking at some live pictures now of the White House. President Barack Obama about to announce details of his new plans to fight cyberterrorism. We're going to bring you those comments coming up live.
(COMMERCIAL BREAK)
COLLINS: Fighting drug abuse in the United States is quite an expensive undertaking, even more than you might think. CNN's Brooke Baldwin takes a look at where your tax dollars are really going.
(BEGIN VIDEOTAPE)
BROOKE BALDWIN, CNN CORRESPONDENT (voice-over): As the war on drugs wages on, American taxpayers are paying for it in ways you might not realize. That's according to a report released by the National Center On Addiction And Substance Abuse, a group at Columbia University.
SUSAN FOSTER, CENTER ON ADDICTION AND SUBSTANCE ABUSE: This is a spectacular waste of taxpayer dollars. And it's time to shift these -- the burden and to shift the spending patterns.
BALDWIN: Of the $3.3 trillion the federal and state governments spent in 2005, $374 billion went to tobacco, alcohol and illegal and prescription drug abuse, including its consequences. For every dollar spent by state and federal governments, CASA says 96 cents paid for the burden of abuse, including law enforcement, child welfare and health care for cancer, cirrhosis or overdose. Only 2 cents covers the cost for prevention and treatment, like screenings or intervention.
FOSTER: Rather than investing in effective prevention programs that can spot this problem early, we are waiting. We're ignoring the problem. We are looking the other way. We're waiting until these problems show up in our juvenile justice systems.
BALDWIN: On the same day CASA released its report, the White House Office of National Drug Control Policy released one of its own. Its research reaffirms the connection between drugs and crime and emphasizes the need to expand drug treatment programs, particularly for non-violent offenders, more effective alternatives to prison.
In a statement on the group's Web site, the director said, "Research shows that recidivism rates go down substantially among those who undergo treatment and recovery support services in the criminal justice system."
(on camera): CASA says there is still a stigma attached to the disease of addiction and that public policy and public attitudes have not accepted it. And that is reflected in the spending, and CASA says that needs to change.
Brooke Baldwin, CNN, New York.
(END VIDEOTAPE)
