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Despite Government Clampdown, Video and News Are Getting Out of Iran; Phoenix Kidnapping Cases Detailed
Aired June 17, 2009 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: OK. We want to show you some video just in to the CNN NEWSROOM. This is amateur video of a Mir Hossein Moussavi rally in Tehran, crossing a bridge as you can see here. You would think it's stopping some traffic right now and quite a turnout.
As you know, international journalists have been banned from reporting on the rallies on the streets of Tehran. So, we are efforting these accounts of the story from as many sources as we can get our hands on, following the Internet, social networking sites. And this is some amateur video just in to CNN a short sometime ago from -- taken from a Moussavi rally on a bridge in Tehran.
Of course, we will continue to bring you -- as you can see, it looks pretty peaceful. But you would imagine that it's caused quite a bit of traffic congestion. As you know, Moussavi has called for an even bigger rally than the one we're seeing here, perhaps bigger than the ones we've seen over the last three to four days for tomorrow.
We are following development in Tehran with these demonstrations as west we can for you right here in the CNN NEWSROOM.
And leading our coverage this hour, there is a new financial sheriff in Washington. At this hour, President Obama proposes sweeping financial rules designed to rope in the "Wild West" mentality on Wall Street and prevent another system-wide meltdown. Some called the regulatory shake-out the biggest since the Great Depression.
At this hour, White House correspondent Susan Malveaux and Wall Street ace Susan Lisovicz.
Suzanne, let's begin with you. This proposal from the president that we'll hear details on in the hour has been a while in coming. What is the president going to say this hour?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Tony, I like that, the new sheriff in town there. We actually did just see the president before his economic team, the treasury secretary, Tim Geithner, some others -- some regulators there.
Obviously, some important things that are on the agenda that he's rolling out. First and foremost, they say, what's most important is that the Fed is going to have an expanded role, it's going to have more oversight of financial institutions, those big banks as well as some insurance companies, like AIG, to make sure they can really regulate these big institution, put some more teeth behind that organization. Secondly, they're going to ask Congress for the administration to have more power to dismantle companies essentially that are broken, so you don't have this domino effect, if one fails, they all fail because they can't intervene quickly enough.
And then finally, they say they're creating a new agency -- a brand new agency to protect consumers when it comes to their mortgages, their credit card payments, that type of thing, to kind of help them kind of maneuver through the system to help them better regulate their own lives, financial lives, if you will.
And, Tony, you know, all of this, they're throwing out, all big changes. I asked Christina Romer, she's one of the top economic advisers for the president, "What's the most significant thing we're going to hear today from the president?" And here's what she had to say.
(BEGIN VIDEO CLIP)
CHRISTINA ROMER, WHITE HOUSE ECONOMIC ADVISER: The most important change for the overall stability of the system is having the Federal Reserve as the systemic regulator to make sure that somebody is watching all of the big, interconnected, important financial institutions, somebody that is going to be accountable. That's just going to be crucial going forward to make sure that if system is stable and there's not too much risk-taking, and we don't ever get into a crisis like we've just been through.
(END VIDEO CLIP)
MALVEAUX: So, Tony, there are a lot of people who are going to be looking and listening carefully to what the president outlines this morning -- just in a couple hours or so. And there's consumer groups, advocacy groups who are already saying, "Look, we want more protection here. This isn't enough." And we've got hedge fund groups, they are running their own campaigns, saying "too much regulation."
So, obviously, this is going to be kicked up to the Hill. They're going to have hearings on all this, to be able to dissect all of this -- 85 pages, Tony. A lot more work to be done here to figure all this out.
HARRIS: At the White House, Suzanne Malveaux for us -- Suzanne, appreciate it. Good to see you. Thank you.
So, what does Wall Street think about the crackdown that is coming its way. Let's bring in CNN's Susan Lisovicz at the New York Stock Exchange.
And, Susan, I guess that's the question. What is the reaction to the people you talked to there on the street about -- at least all the conversation that's going on about the sheriff coming in town to regulate you Wall Street types?
(LAUGHTER)
SUSAN LISOVICZ, CNN CORRESPONDENT: Last time we used sheriff, it was about Eliot Spitzer.
HARRIS: Oh!
LISOVICZ: So, that congers up bad images for many reasons, Tony.
HARRIS: Very nice. Yes.
LISOVICZ: But, you know, it's 85 pages, 85,000 opinions, Tony. The CEO of the NYSE, Duncan Niederauer, says it's a critical step toward restoring trust in capital markets.
Well, I should mention that the NYSE stands to benefit, because one of the things that's happening in this proposal is that you're going to make some of these exotic instruments that Ali and you were just talking about, these derivatives -- hard to understand, hard to value, hard to trade sometimes -- they may be trading here or cleared here at the NYSE. That's one of the many changes.
But there's lots of other opinions, too. An attorney who specializes in stock fraud, for instance, who's been very busy, says that the president is missing a 70-year opportunity because it does not go far enough, allowing Congress to fill in many of the blanks allows special interest groups -- in his opinion -- to work their influence.
The failure to fold the SEC. This is, after all, the agency, the commission that missed the Bernie Madoff scandal when it was warned about it repeatedly.
No super-regulator, you know, even though the Fed has been given enhanced powers. There's no super-regulator. And so, you still do have a number of regulators. And that was one of the problems in this particular financial crisis.
I should also say that, you know, in terms of popularity of new regulation on Wall Street, there's a great deal of skepticism ...
HARRIS: Yes.
LISOVICZ: ... because I feel that a lot of people here feel that Congress played a large role in the magnitude of this crisis of removing some of the barriers that created, allowed these financial companies to become financial supermarkets, really wrapping up the leverage. That was just one of the problems. And also, enabling Fannie Mae and Freddie Mac to become too big ...
HARRIS: Too big.
LISOVICZ: ... to fail, by lowering their lending standards.
HARRIS: Yes. Good points.
LISOVICZ: So, lots of different opinions.
HARRIS: Yes, good points. All right. Susan, appreciate it. Thank you.
LISOVICZ: You're welcome.
HARRIS: And once again, you know, you can see President Obama's announcement of the new financial regulations live in the CNN NEWSROOM. He's scheduled to speak from the White House East Room at 12:50 p.m. Eastern Time.
And video just in to CNN moments ago of the day's election protests in Iran. Supporters of defeated presidential candidate Mir Hossein Moussavi holding a fifth straight day of rallies despite a government ban, foreign media outlets kept far away.
Officials are trying to prevent images like these from getting out. They appear to show riot police attacking protesters. The elite Revolutionary Guard corps now vowing to pursue legal action against Web sites, that say, are inciting people to riot. Iran's government accuses international journalists of being a mouthpiece for so called hooligans.
Let's go live now to the Iranian capital and our Reza Sayah joins us from Tehran.
And, Reza, if you would, what more can you tell us? I know it's probably not much -- but what more can you tell us about what's happening there today?
REZA SAYAH, CNN CORRESPONDENT: Well, every day we wake up here in Tehran, we're very curious to see if the supporters of Mir Hossein Moussavi have run out of steam. And again, today, the answer is no. For the fifth day in a row, we're seeing a very large rally and gather at a major square here in Tehran. These rallies started 5:00 p.m. local time, 3 1/2 hours ago.
We have been banned by the Iranian government from covering and broadcasting images of rallies. So, we've done our best to get as many eyes and ears as possible at these rallies to report back to us. And they report another large gathering, tens of thousands of people.
And what's interesting to note, we haven't seen as much violence today and yesterday as we had seen in the past. And that's perhaps because of the new strategy that the Moussavi supporters are using in these marchers. And their trademark seems to be silent marchers, and we're seeing that today according to our people on the ground. Basically, you have thousands of people marching in silence, holding up a victory sign.
And today, from what we're hearing, many supporters are putting tape on their mouths, a message to their fellow supporters not to say anything -- perhaps an effort on their part not to provoke the riot police and members of the Basijs, who oftentimes standing by with batons and clubs. So, they're not running out of steam.
And earlier today, on the soccer field in South Korea, another interesting development -- members of Iran soccer team wearing green wrist bands in apparent show of support for the Moussavi movement. It's interesting to note when they came out in the second half, those wrist bands were off. No word if the Iranian government instructed them to take them off. But an interesting development as political drama is unfolding out in South Korea today, Tony.
HARRIS: All right. Reza Sayah for us from Tehran -- Reza, appreciate it. Thank you.
Wading into Iranian politics, just a bit, President Obama says there's not much difference between Iran's president, Mahmoud Ahmadinejad, and his challenger, Mir Hossein Moussavi.
(BEGIN VIDEO CLIP)
PRES. BARACK OBAMA, UNITED STATES: It's important to understand that although there is amazing ferment taking place in Iran, that the difference between Ahmadinejad and Moussavi in terms of their actual policies may not be as great as has been advertised.
(END VIDEO CLIP)
HARRIS: Disagreeing with the president? CNN chief international correspondent Christiane Amanpour points out the differences.
(BEGIN VIDEO CLIP)
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: There is actually a difference between Mr. Moussavi and President Ahmadinejad, most particularly in domestic policy. And that is why there's a divided nation on the ground right now, those huge supporting crowds for Ahmadinejad and that gathering momentum for reform.
And having experienced Iran, for instance, over the years of reform under President Khatami and seeing the complete difference in tone and the difference in reaching out to the world in terms of foreign policy and again tone, compared to the four years of Ahmadinejad, it's almost night and day.
The president, on the other hand, is correct about foreign policy. There is foreign policy conducted by Ayatollah Khamenei, the supreme leader. And he is the one who deals with relations with the United States, with the military policy, U.S. policy, and other foreign policy.
(END VIDEO CLIP)
HARRIS: Much of the information and images that we're getting from Iran coming to us through online social networking services. CNN's Isha Sesay is monitoring the Internet and joins us from our Iran desk.
Isha, some pretty dramatic video a short time ago, amateur video of Moussavi rally apparently on a bridge -- and at least that one side of the bridge stacked with people.
ISHA SESAY, CNN CORRESPONDENT: Absolutely, Tony. Absolutely dramatic footage.
And the thing we want to stress to our viewers who are, you know, obviously, closely following the story as we are, is that we had seen, a short time ago as we monitored Twitter, that more and more tweets were appearing, saying that this rally was under way. We didn't have the pictures. Now they have come through.
And as you see there ...
HARRIS: Wow.
SESAY: ... you see people on that bridge, crowds of people out there despite the fact that the government is trying to clamp down on this dissent.
Tony, earlier on today, we got reports of the Revolutionary Guard, which is Iran's most pivotal, I should say, military force, basically had put out this word that Iranian bloggers, Iranian Web sites should take town any material that could inflame tensions or they could face legal action. Nonetheless, Tony, the images keep coming out. Protesters want the rest of the world to see the sights and sounds of Iran.
HARRIS: Yes.
SESAY: We want to show you dramatic footage ...
HARRIS: Oh, great.
SESAY: ... that's come in to us, also, aside from that video that you were just showing -- video from Tehran University now. There you have it -- coming to us by way of one of our iReporters.
HARRIS: OK.
SESAY: You see the scene there, Tony. One of carnage, it looks like -- it looks like a war zone. This is some of the freshest video coming in to us here at the Iran desk. We want to show our viewers this. There have been widespread reports of a crackdown at these universities, reports of beatings and students being arrested.
To give our viewers some perspective, Tony, we know that Iran has an extremely young population.
HARRIS: That's right.
SESAY: According to some estimates, more than half the population is young. It's young. It's educated and it's plugged into the Internet. And you see they're finding ways to get around the censors, the hurdles, to bring us the stuff, Tony.
HARRIS: That's terrific. And we'll keep reminding you, at home, we're going to try to bring you these images and provide the absolute proper context on everything that we show you.
Isha, appreciate it. Thank you -- Isha Sesay from the Iran desk.
You know, online social networking in Iran is so important right now that the U.S. State Department is weighing in. Really? Josh Levs is following that for us -- Josh?
JOSH LEVS, CNN CORRESPONDENT: And, Tony, that's a perfect example, what we were just getting from Isha there, how significant it is ...
HARRIS: Yes.
LEVS: ... in getting this information out, you got a media cramp down, you have authorities there preventing some Web sites from existing. Still, people are getting these things out. U.S. State Department is saying make sure to keep it out.
Let's zoom in on the board. I want you to see, even as we talk about our Iran story, and you can hear about the media grip a lot, and this is one of our headlines, "Officials: Social networking providing crucial info from Iran." And we write, too, here in CNN.com -- we write about the fact that the State Department reached out to Twitter and asked them to actually postpone a scheduled maintenance so they could keep it up.
Now, we have Twitter's response. Let's go to this graphic. I want you to see what Twitter is saying when they weigh in today. They say, "It's humbling to think that our two-year-old company could be playing such a globally meaningful role that state officials find their way toward highlighting our significance."
And they go on to say, "However, it's important to note the State Department does not have access to our decision-making progress. Nevertheless, we can both agree that the open exchange of information is a positive force in the world."
So, Tony, what they're saying there, getting the message out clearly, we at Twitter are not a government agency, no particular links that way.
HARRIS: Right.
LEVS: But, that they do understand that they are playing a very significant role, a company that a couple years ago was pretty small.
HARRIS: OK. Let me follow up this way, Josh.
LEVS: Yes.
HARRIS: And we also have a statement from YouTube ...
LEVS: YouTube, right.
HARRIS: ... about whether it is actually censoring material from Iran.
LEVS: Yes. And that's interesting, too. It's something else that YouTube is weighing in on today. We're getting a lot of material through YouTube, even though YouTube itself says a lot of people in Iran cannot access it because they believe it's been blocked. But let's take a look at one of the latest pieces of video here.
(VIDEO CLIP)
HARRIS: Whoa. LEVS: And, Tony, I'll tell you a little bit about what we're seeing.
HARRIS: Yes.
LEVS: We're emphasizing "unverified material." We're not there. This is media clamp down. We cannot know everything we're seeing. But it seems ...
HARRIS: Yes.
LEVS: ... it seems that a police officer hit a woman with the club who was on the ground or with a baton. She then seemed to stand up and yell at him. It's another example of what's coming in via YouTube.
And, some people are starting to ask and YouTube wrote about this today. Is YouTube censoring? Is it limiting? Does it have community guidelines about what it's willing to post?
YouTube wrote this today. Let's go to that graphic. They put out this statement basically weighing in.
They say, in general, they don't allow graphic or gratuitous violence on YouTube. They say, "We make exceptions for videos that have educational, documentary or scientific value. The limitations are being placed on mainstream media reporting from within Iran," they're saying, "make it even more important." They say, "That citizens in Iran should be able to use YouTube to capture their experiences for the world to see." And they add this, at the end, that they're doing their best to leave as many of them up as they can.
Interesting point, Tony. As they go through this, we're thinking, "Oh, we're getting video from YouTube." YouTube has a history because they have community guidelines of not posting everything. So now, they're in this situation. What do they post, what do they not post -- ultimately having a really important role in the world right now, images like that.
HARRIS: Well, I'll tell you what -- if that video of that woman getting cracked is what it appears to be, and it certainly looks that way, then you understand why the Iranian government is trying to crackdown on any of those images getting out, to just stop doing it would be.
LEVS: It also shows why so many people are flocking to YouTube to see this stuff.
HARRIS: They're cracking people over the head.
Josh, appreciate it. Thank you.
LEVS: Thanks, Tony.
HARRIS: The battle over health care reform is taking place in the halls of the U.S. Capitol this morning. Who's steering the debate? And which issues are getting the most attention? (COMMERCIAL BREAK)
HARRIS: OK. Welcome back, everyone, to THE CNN NEWSROOM. Eighteen minutes after the hour. I'm Tony Harris.
President Obama is all set to outline his plan for sweeping new financial regulations at 12:50 p.m. We will have, of course, live coverage for you, right here on CNN.
(COMMERCIAL BREAK)
HARRIS: Digging into the details on health care reform, a Senate panel today started work on one of the plain plans backed by Democrats and the Obama administration. And how much of that debate so far is over how much the bill will cost? Well, a lot of it, it seems.
CNN congressional correspondent Brianna Keilar is live from Capitol Hill.
And, Brianna, I'm told you have some late work on the timing of all this. What can you tell us?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Yes, Tony, we've been watching what's going on really in two committees here on the Senate, the Senate Finance Committee and the Senate Health Committee. They've been operating on a really tight timeline that they were going to hash out their differences within committees and vote on their proposals before the July 4th recess. That was the plan and everything like dominos kind of lines up behind that with the ultimate goal of finishing this all up by President Obama's October 15th deadline.
Well, we just learned there's been a significant setback in the Senate Finance Committee. They actually, going through this process of hashing out their bill, they were going to try to do it this week. It kept getting pushed day by day. And we've now learned two Democratic Senate sources confirming to CNN that whole process could be pushed even past the July 4th recess.
Well, at the same time, Tony, though, looking at the Senate Health Committee, they're going through the process today, which is really a significant step, but without the Senate Finance Committee operating on the same timeline, it really just starts to push things back.
HARRIS: Yes.
KEILAR: The issues, of course, are being the cost, but also some of the key issues that Republicans and Democrats disagree about when it comes to health care reform.
HARRIS: Well, why don't we do this, why don't we drill down on the issue of cost because that provided a bit of a dust-up at the start of the Senate subcommittee hearing this morning?
KEILAR: Yes, the very start of it ...
HARRIS: Yes.
KEILAR: ... even before they really got into the issues, Tony. Listen to what you can hear from Senator John McCain and Senator Chris Dodd who is heading up this whole process in Senator Kennedy's absence on the health committee.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: How in the world do we expect to reasonably authorize -- maybe there's good things, maybe there's not -- in this without a cost estimate? It is a joke if we run through this stack of papers here without having some provision. And I suggest we not move forward until we have some provision as to how we're going to pay for it.
SEN. CHRIS DODD (D), CONNECTICUT: We've got here about 300 amendments that have been filed. So, obviously, depending upon the outcome of amendments, that will make those numbers fluctuate one way or another. We're going to send a bill when we complete this process here that will be scored and will be paid for.
(END VIDEO CLIP)
KEILAR: And just to be clear about what Senator Dodd was saying there, he was saying it would be scored, Tony, which basically in congressional parlance means it's going to have a price tag on it, the nonpartisan Congressional Budget Office will tell us how much it's going to cost.
And something else that he said, 300 amendments, Tony.
HARRIS: Yes.
KEILAR: Three hundred proposed changes just to this bill that this one committee is considering. That's a lot of changes -- a lot of Republican-proposed changes. This just shows you they're not really happy with the bill that's before the committee, Tony.
HARRIS: Yes. OK, Brianna Keilar on Capitol Hill for us -- Brianna, thank you.
House Republicans pushing their own plan for health care reform just a short sometime ago. A group of Republican leaders outlined competing proposal. It calls for tax credits to help lower-income Americans pay for private insurance.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R), MINORITY LEADER: The plan that will be unveiled this morning -- we take the current health care system and improve it to make it work better for all Americans, provide easier access to health insurance for those who can't afford it, to make sure those with pre-existing conditions have access to affordable health insurance.
And if you look at this plan, it really will insure most Americans. It really will improve the quality of our health care system and maintain the innovation we have in our current system.
(END VIDEO CLIP)
HARRIS: OK. No price tag yet on the Republican plan and no details on how it would be paid for.
One city out west has seen a rash of 911 calls for people being held hostage in nice neighborhoods. What is going on?
(COMMERCIAL BREAK)
HARRIS: Phoenix, Arizona, did you know it's the kidnapping capital of the United States and some say, the housing bust maybe part of the reason. According to authorities, vacant homes and otherwise unsuspected neighborhoods have become ideal hideouts. Here is CNN's Ed Lavandera.
(BEGIN VIDEOTAPE)
(BEGIN AUDIO CLIP)
UNIDENTIFIED DISPATCHER: 911, what is your emergency?
UNIDENTIFIED CALLER: Help me. I'm in the house.
(END AUDIO CLIP)
ED LAVANDERA, CNN CORRESPONDENT (voice-over): The whispered plea for help came from a man inside this house, a home used to hide illegal immigrants.
(BEGIN AUDIO CLIP)
UNIDENTIFIED DISPATCHER: I'm trying to help get to you. I've got officers in the area.
(END AUDIO CLIP)
LAVANDERA: Inside, investigators discovered, 35 illegal immigrants, half naked, held hostage. Investigators say the man who smuggled them from Mexico into the United States were trying to extort more money than the immigrants had originally agreed to pay for crossing the border. Authorities say these cases are getting more violent.
SGT. TOMMY THOMPSON, SPOKESMAN, PHOENIX POLICE: It often wind up on one end of a telephone while they're being tortured.
LAVANDERA: In this house, investigators found boarded windows, a handgun, and knives and two baseball bats allegedly used to beat the illegal immigrants. But in a unique twist, the real estate crash in Phoenix is providing the ideal backdrop for these smugglers-turned- kidnappers to operate.
As the housing bubble burst, many homeowners have scrambled to rent out the homes they can't sell. "For Rent" signs can be found all over the city. Phoenix police say kidnappers use fake clients, usually a couple posing as a family to rent a home.
THOMPSON: Unbeknownst to the landlord, those people are just straw people. They are sent there to obtain that property, to rent that property, so that they can -- so that it can be gotten for those that are involved in the illegal enterprises.
LAVANDERA: Phoenix police say there were nearly 370 kidnapping cases last year. That translates to hundreds of people held inside roughly 80 drop houses, average-looking homes in everyday middle class neighborhoods. It's happened so often here neighbors are unfazed.
TONY CORDEIRO, NEIGHBOR: It's all over. You have this stuff, it's all around, you know, the whole valley.
LAVANDERA: Behind the curtains of these drop houses, investigators say, kidnappers have created fortresses, complete with surveillance systems and fortified locks installed by the smugglers. You might say these are unexpected upgrades to homes once at the heart of the real estate boom.
(on camera): Phoenix authorities believe drop houses in many other cities across the country are being used in kidnapping situations, but they say, those cases are probably never reported.
Ed Lavandera, CNN, Phoenix.
(END VIDEOTAPE)
HARRIS: Consumer prices rose less than expected last month. It's another sign the recession is holding prices down and keeping inflation in check. The Labor Department says the consumer price index rose one-tenth of 1 percent in May. That's less than economists predicted. Consumer prices fell 1.3 percent over the past 12 months. That is the steepest year-over-year drop since 1950.
Thinking like a monopoly champ could help you get rich and stay that way. That's the advice in today's "Mind Over Money" report.
(BEGIN VIDEOTAPE)
ROBERT KIYOSAKI, INVESTOR/AUTHOR: I'm writing a book right now called, "The Conspiracy of the Rich." It's a free online book about the conspiracy of the rich and eight new rules of money. Because the people that are following the old rules, such as work hard, save money, get out of debt, live below your means, and invest in a well- diversified portfolio, mutual funds, they're getting wiped out. One of the most important rules, eight new rules, is prepare for bad times and you'll always know good times.
The reason people are in trouble today is because most Americans have only known good times. Now that we're in bad times, they really don't know what to do.
Personally, if you're going to be an investor, the time to come in is now, at the bottom of a market. Most people invest for capital gains. That's where they say my house is going to appreciate or the stock market is going to go up. That's investing for capital gains. That's gambling. You might as well go to Las Vegas.
If you want to be rich, invest for cash flow. My wife and I own apartment houses. And even in this bad real estate market, people still have to rent our apartments. So every month we have cash flow from our rental units.
Most of us know the formula for great wealth, it's found in Monopoly. It's four green houses, one red hotel. I mean you look at the cards from Monopoly, so you've got one green house, you get $10. Two green houses, $20. Three green houses,$30. Four, $40. Red hotel, $60. That's cash flow. Best teaching tool investments I've ever learned.
(END VIDEO CLIP)
TONY HARRIS, CNN ANCHOR: You've made all your mortgage payments on time and you think everything is OK. Now your house is being foreclosed on. How did that happen?
(COMMERCIAL BREAK)
HARRIS: All right, let's get you going here. Cnnmoney.com, your number one source for latest financial news and analysis. There's the big page there and sure it's talking about what's coming up in just a couple of moments, President Obama detailing financial reform as he sees it. You can't do any better than cnnmoney.com. We will talk to a member of that team in just a couple of minutes, Poppy Harlow, maybe 30 seconds or so.
You know, let's get you to the big board now. New York Stock Exchange, as you can see, left of your screen there. The Dow is up 20 points after being pretty much flat throughout the morning. We are just past three hours into the trading day. We will follow the numbers -- Nasdaq up 13 as well -- with Susan Lisovicz throughout the day right here in the CNN NEWSROOM.
President Obama is expected to detail his plans for financial regulatory reform in about 15 minutes. So just how convoluted is the current system? Poppy Harlow has the breakdown for us from New York.
Good to see you, Poppy.
POPPY HARLOW, CNN CORRESPONDENT: Good to see you, too, Tony.
Yes, we are looking at what is just an alphabet soup of different regulatory agencies in this country. I want you to take a look at the list here because it really is mind-boggling. Look, we've got the Fed, we've got the Treasury, we've got the SEC, the FDIC, the National Credit Union and also the Commodity Futures Trading Commission, which regulates the trading of commodities like oil. Right.
Those are just the federal agencies, Tony. When you add on the state regulators, you're talking about 56 different regulatory bodies for financial firms in this country. And Treasury Secretary Geithner on Monday said it's pretty well speaking to a group of people here at CNN in New York. He said the agencies go like that and they point at each other sometimes. That can be a big, big problem. HARRIS: Well, Poppy, how large a role has this hodge-podge (ph), folks go it enough, this is -- how big a role has it played in this economic downturn?
HARLOW: Yes, that is the question, right, how did we get here? Why?
HARRIS: Yes.
HARLOW: When we spoke with a senior fellow at the Brookings Institution, he said, yes, it was a contributing factor to this downturn but not the overwhelming factor. And he points to England. And this is a very good example. Because in England, you only have one regulatory body overseeing the financial market. But, still, England got caught up in the same mess, the credit crunch. It had to bail out its banks as well just like the U.S.
And some say what matters most is that the agencies that had the power, Tony, didn't use it properly. That's the big complaint now. And whether these reforms that we're going to hear the president outline in less than an hour, whether they're going to make a big difference is still to be seen because the number of agencies, Tony, is not really changing.
The administration is going to get rid of that Office of Thrift Supervision, they're going to merge it with the Comptroller of the Currency. But at the same time, they're proposing that new agency, the Consumer Protection Agency. So instead of getting rid of agencies, we're seeing new layers added on top here. And, of course, we'll see if it makes it through Congress. There will be a lot of debate. But we're not cutting down the agencies.
HARRIS: Yes, that's so interesting because you just outlined an argument for not adding new regulation, but just enforcing the regulations that you already have on the books.
HARLOW: That's what a lot of people want. I just spoke with Steve Bartlett (ph). He's the head of the consumer -- the financial services roundtable. He said exactly that, why add another agency?
HARRIS: Yes. All right. Cnnmoney.com's Poppy Harlow for us.
Poppy, appreciate it. Thank you for the breakdown.
Las Vegas is the foreclosure capital of the country. You're about to meet a Las Vegas homeowner who did everything right but could lose her home anyway. Mitch Truswell from affiliate KVBC has the story. It is a bureaucratic bungle and a whole lot of run-around.
(BEGIN VIDEOTAPE)
MITCH TRUSWELL, CNN CORRESPONDENT (voice-over): Tucked away inside this Las Vegas home, above Maria Espinoza's living room, it says "home is where your story begins." And this one starts with a legal notice telling Maria and her husband their home was being sold to settle a debt.
TRUSWELL (on camera): You've never been late on a payment?
MARIA ESPINOZA, HOMEOWNER: Never.
TRUSWELL: You're current with all your payments?
ESPINOZA: Correct. I've never been late on any kind of mortgage payment ever.
TRUSWELL: And you get this notice?
ESPINOZA: And then I get this notice.
TRUSWELL: Maria, who's a realtor, noticed her address was, in fact, listed on the notice of trustee sale, but not her name. It had someone else's.
ESPINOZA: It's just incredible that a bank is trying to foreclose on your property that's not your bank.
TRUSWELL: And it's not their property?
ESPINOZA: And it's not their property. So what right do they have?
TRUSWELL (voice-over): Maria called the Recontrust Company, listed on the document as the agent handling the trustee sale.
ESPINOZA: We just got hung up on.
TRUSWELL: She called the bank who handles her current mortgage thinking they would be concerned about the possible sale of her home. She says they never called her back. The title company who was supposed to make sure her home was free and clear when she bought it, she says wasn't any help either.
ESPINOZA: My husband went to take some paperwork and left it there and they told him to come back tomorrow and we'll let you know. He came back the next day. They told him you need to get a lawyer. They didn't give him anymore information.
TRUSWELL: Well, she got a lawyer and finally got some answers.
IHAB OMAR, MARIA ESPINOZA'S ATTORNEY: We figured out that this was a previous loan on the house that was never paid off.
TRUSWELL: Attorney Ihab Omar says it wasn't the couple the Espinoza's bought the home from, but the owner before that, that possibly never paid off a VA loan when they sold the home in 2004.
OMAR: I've been a lawyer for seven years. I've been doing this particular stuff for about 18 months. And this is the first time I've heard of it. And it was -- what's even more surprising is that nobody stepped up to the plate to help this lady.
TRUSWELL: We wanted to find out how this could happen and should the public be worried about this kind of thing happening to them. We contacted Chicago Title and went to the same office the Espinoza's went to when they were told to get their own lawyer.
UNIDENTIFIED FEMALE: We knew you were coming because we heard from the other office.
TRUSWELL (on camera): Right. It's been two days and I haven't got any response at all. These people are freaked out because they're told their house is going to be sold.
UNIDENTIFIED FEMALE: Well, this has to go through our legal -- it's going through our legal department right now.
TRUSWELL (voice-over): The marketing department referred me to this site, the American Land Title Association, which explains why everyone needs title insurance. It says "your title company will stand behind you - monetarily and with legal defense if need - if a covered title problem arises after you buy your home."
(END VIDEOTAPE)
HARRIS: Wow. The homeowner's attorney is planning a lawsuit against Chicago Title. He is also working with Bank of America, the mortgage holder, to stop foreclosure of the Espinoza's home.
HARRIS: A cash-strapped airline asks its employees to work a month for free. Last month British Airways posted a record annual loss of $656 million. That's a lot of money to be sure. The airlines' appeal to workers is the basis of our blog question today. Would you work for free?
We got this response from Tony. Huh. "If I really love my job and could make it without a month's pay and the company was good to me, I would take one for the team for sure."
From John Slocum. John writes, "I worked for free for eight months. Small business owners always work for free in bad times."
John Showalter says, "not just no, but heck no." I think he wanted to say something other than heck. Did we edit that? "Funny how the money guys always want the little guy to bite the bullet for the good of the company so they can continue the status quo. Disgusting."
And from Larry, "the only way I would is if they made me. Even then, they wouldn't get much out of me. I would come in late, leave early and take three-hour lunches. They would pay me again after a week."
Post your comments on our blog. Join the conversation at cnn.com/newsroom. That was a good one.
Women in Iran are speaking out. One who is inspiring them is being called Iran's Michelle Obama.
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HARRIS: Tech savvy Iranians have managed to get video out of the country showing today's election protest. Supporters of opposition candidate Mir Hossein Mousavi pouring into the streets by the thousands -- boy, look at this -- for a fifth straight day of rallies. Despite a government ban, interestingly, state media did air some video of the rally. These pictures just in to CNN. But foreign media is being kept far from the action.
Officials trying to prevent images like these from airing around the world. Look at this. They appear to -- look at this. They appear to show riot police attacking protesters. The Revolutionary Guard Corps now vowing to pursue legal action against websites that they say are inciting people to riot. CNN i-Reporters are putting themselves at great risk to send us pictures and reports from the rallies. Iran's government accuses international media of being a mouthpiece -- look at this -- for so-called hooligans.
Young Iranian women are a big part of the protest. It is unusual to see them openly rallying in the streets. Many being inspired by the wife of reformed candidate Mir Hossein Mousavi. She is being called Iran's Michelle Obama. CNN's Carol Costello has that story.
CAROL COSTELLO, CNN CORRESPONDENT: Tony, Iranian women remain second class citizens in criminal matters, divorce, child custody and inheritance cases. President Ahmadinejad has even tried to make it easier for men to take more than one wife. So for women activists living here in the United States, the sight of Iranian women protesting is a source of great pride.
(BEGIN VIDEOTAPE)
COSTELLO (voice-over): Braving violence, even prison, Iranian women have proved to be fearless. For Iranian women living here in the United States, seeing women on the front lines of protest is striking. Ask them if they're proud . . .
AZAR NAFISI, "READING LOLITA IN TEHRAN": Oh, you bet your life, yes.
COSTELLO: Azar Nafisi is in awe of them. She wrote "Reading Lolita in Tehran," a best-selling book about, in part, the erosion of women's rights in Iran.
NAFISI: They proved not just their existence, but their right to exist the way they want to.
COSTELLO: Nafisi says of all the protesters who feel cheated at the polls, Iranian women may feel it most. In Ahmadinejad's rival, Hossein Mousavi, and especially in his wife, feminists have finally found a powerful voice to help them achieve their goals. The love young women have for Rahnavard apparent at a pre-election rally.
SAHKIBA SHAKER MIR-HUSSEIN, MOUSAVI SUPPORTER: We look at her and we see that we will be like her, the future.
COSTELLO: Iranian women call Zahra Rahnavard their Michelle Obama. She has a Ph.D., authored 15 books. And like the American first lady, she's not shy about showing love for her husband. Except in Iran, this is a courageous act because it could get you a reprimand from Iran's morality police.
NAFISI: They see in her the potentials for what they want.
COSTELLO: Under President Ahmadinejad's regime, dozens of women have been jailed for participating in a grassroots women's right campaign called 1 Million Signatures. Some say their continued efforts, cupeled with Zahra Rahnavard's public strength, intimidate hardliners. Apparent some say in a pre-election debate when Ahmadinejad took the unusual step of accusing his opponent's wife of not being qualified to teach.
PRES. MAHMOUD AHMADINEJAD, IRAN (through translator): She got a Ph.D. without attending the university entrance exam. And then she's now an assistant professor without any qualifications. She's now heading the faculty. This is lawlessness.
COSTELLO: But her record is legit. And thousands of Iranian women continue to rally for her husband's victory, no matter the cost.
(END VIDEOTAPE)
COSTELLO: Even if Ahmadinejad retains his presidency, women will consider their efforts a victory. The fact Iran is considering a partial recount means they forced the government to take them seriously.
Tony.
HARRIS: All right, Carol, thank you.
The U.S. military appears closed to releasing its findings on a disputed U.S. raid in Afghanistan. The air strikes in Farah Province on May 4th killed dozens of civilians. The Afghans put the number at 147, but the U.S. said it is much lower. According to the Associated Press, the upcoming report will recommend better training for U.S. troops and a review of the rules of close air support.
Let's show a live picture now. We are moments away from President Obama unveiling the new financial regulatory powers he wants from Congress. The president's address scheduled shortly. We'll bring it to you live right here in the CNN NEWSROOM.
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HARRIS: OK. A live view now. In just a couple of minutes -- we see folks coming into the room now -- President Obama is set to unveil his few, his take on financial reform. OK. And there's the announcement. The president is coming out. The talk about financial regulatory reform. Here's the president of the United States.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Please, everybody, be seated. Thank you very much.
Since taking office, my administration has mounted what I think has to be acknowledged as an extraordinary response to a historic economic crisis. But even as we take decisive action to repair the damage to our economy, we're working hard to build a new foundation for sustained economic growth. Now, this will not be easy. We know that this recession is not the result of one failure, but of many. And many of the toughest challenges we face are the product of a cascade of mistakes and missed opportunities which took place over the course of decades. That's why, as part of this new foundation, we're seeking to build an energy economy that creates new jobs and new businesses to free us from our dependence on foreign oil. We want to foster an education system that instills in each generation the capacity to turn ideas into innovations and innovations to industries and jobs. And as I discussed on Monday at the American Medical Association, we want to reform our health care system so that we can remain healthy and competitive.
Now this new foundation also requires strong, vibrant financial markets, operating under transparent, fairly administered rules of the road that protect America's consumers and our economy from the devastating breakdown that we've witnessed in recent years. It is an indisputable fact that one of the most significant contributors to our economic downturn was an unraveling of major financial institutions and the lack of adequate regulatory structures to prevent abuse and excess.
A culture of irresponsibility took root from Wall Street to Washington to main street. And regulatory regime basically crafted in the wake of a 20th century economic crisis, the Great Depression, was overwhelmed by the speed, scope and sophistication of a 21st century global economy.
Now in recent years, financial innovators seeking an edge in the marketplace produced a huge variety of new and complex financial instruments. And these products, such as asset-based securities, were designed to spread risk, but, unfortunately, ended up concentrating risk. Loans were sold to banks, banks packaged these loans into securities, investors bought these securities often with little insight into the risks to which they were exposed. And it was easy money while it lasted.
But these schemes were built on a pile of sand. And as the appetite for these products grew, lenders lowered standards to attract new borrowers. Many Americans bought homes and borrowed money without being adequately informed of the terms and often without accepting the responsibilities.
Meanwhile, executive compensation, unmoored from long-term performance or even reality, rewarded recklessness rather than responsibility. And this wasn't just the failure of individuals. This was a failure of the entire system. The actions of many firms escaped scrutiny. In some cases, the dealings of these institutions were so complex and opaque that few inside or outside these companies understood what was happen.
Where there were gaps in the rules, regulators lacked the authority to take action. Where there were overlaps, regulators lacked accountability for their inaction. An absence of oversight engendered systematic and systemic abuse. Instead of reducing risk, the markets actually magnified risks that were being taken by ordinary families and large firms alike. There was far to much debt and not nearly enough capital in the system. And a growing economy bread complacency.
Now we all know the result. A bursting of a debt-based bubble, the failure of several of the world's largest financial institutions, the sudden decline in available credit, the deterioration of the economy, the unprecedented intervention of the federal government to stabilize the financial markets and prevent a wider collapse, and most importantly, the terrible pain in the lives or ordinary Americans. And there are retirees who have lost much of their life savings and families devastated by job losses. Small businesses forced to shut their doors.
Millions of Americans who have worked hard and behaved responsibly have seen their life dreams eroded by the irresponsibly of others and by the failure of their government to provide adequate oversight. Our entire economy has been undermined by that failure.
So the question is, what do we do now? We did not choose how this crisis began, but we do have a choice in the legacy this crisis leaves behind. So today my administration is proposing a sweeping overhaul of the financial regulatory system. A transformation on a scale not seen since the reforms that followed the Great Depression. These proposals reflect intensive consultation with leaders of Congress, including those who are here today.
Chairman Dodd and Chairman Frank, who along with Senator Shelby and Representative Backus will be meeting with me through out this process. They met with me earlier this year to jump-start the discussion of reform. These reforms are also drawing on conversations with regulators, including those I met with this morning, as well as consumer advocates and business leaders, academic experts and the broader public.
In these efforts we seek a careful balance. I've always been a strong believer in the power of the free market. It has been and will remain the engine of America's progress. The source of prosperity that's unrivaled in history.
