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Home Prices Monthly Rise for the First Time in Three Years; Second Day of U.S.-China Talks; Bargain-Hunting Time; "Bikini Bandit" Locked Up; Talks with the Taliban
Aired July 28, 2009 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: New evidence, new claims in the Michael Jackson case. CNN sources reveal the latest on the investigation into his death.
And health care reform -- Congress drops a deadline, the president picks up the phone.
And stretching your dollar. We have the list of what you should consider buying right now.
Good morning, everybody, I'm Heidi Collins. Today is Tuesday, July 28th, and you are in the CNN NEWSROOM.
This morning we are covering all the issues of the health care debate. In fact, at the White House this morning, our Suzanne Malveaux is looking at the latest blow to the president's top domestic issue. And on Capitol Hill, Brianna Keilar this morning is going to be asking the question, what now, what next?
And our Dr. Sanjay Gupta is going to cut through all the clutter. Our chief medical correspondent answers your question on what the changes would mean to you.
So let's dive right in. Congress makes it official. Lawmakers will not vote on health care reform plans before Friday as originally planned. That is a blow to the president who first set that deadline and the health care reforms that are a center piece of his agenda.
CNN congressional correspondent Brianna Keilar joining us from Capitol Hill this morning.
So, Brianna, are Democrats in the House going to be able to work out their differences before they leave for their August break?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, they're certainly not going to be having a vote before Friday.
COLLINS: Right.
KEILAR: We heard that from the number two Democrat in the House, Steny Hoyer, last night after some late-night negotiations, Heidi. But whether they're going to be hanging around to work out those differences and to get a vote, that is still this question mark, but at the same time, Steny Hoyer trying to down play this delay. This is what he said late last night.
(BEGIN VIDEO CLIP)
REP. STENY HOYER (D), MINORITY LEADER: This bill, most of it, will go into effect in 2013. So time is not running out in the sense. And we have a postal service shortage problem. Time is running out on that because the money is running out. We're not in that situation.
(END VIDEO CLIP)
KEILAR: But still, the infighting right now going on between Blue Dog Democrats and Democratic leaders and key Democrats, like that man you just saw, Henry Waxman there, the chairman of the key committee considering health care.
This infighting isn't over, Heidi. In fact, after this late night meeting last night we did learn, though, there is an offer on the table. Henry Waxman, the chairman of the committee where Blue Dog Democrats have delayed this health care plan.
COLLINS: Yes?
KEILAR: He made them an offer. What's in the offer? We don't know exactly what's in it.
COLLINS: Oh.
KEILAR: Are Blue Dogs going to accept this offer? We don't know at this point. They're obviously mulling it over and considering their next move, and that's really where we've picked things up today and what we're watching today. Heidi?
COLLINS: OK. Obviously you're going to be trying really hard to find out what is in that offer. But in the meantime, it seems very unlikely there's going to be a vote on health care in the House at all before September, right?
KEILAR: It seems like a very heavy lift to do that. But at the same time, it's important to note that Democratic leaders in the House aren't completely shutting the door on that. But they're not going to vote by Friday.
If they want to vote before they go away for their August recess, Heidi, they're going to have to stay the weekend or they're going to have to stay into next week to get this moving along so they can have their vote.
COLLINS: All right, understood, working all her sources today, Brianna Keilar on Capitol Hill.
Thank you, Brianna.
President Obama is looking beyond the setback and reaching out directly to the public now. Today his focus is on older Americans and CNN White House correspondent Suzanne Malveaux joins us with more on this.
Suzanne, good morning to you.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning.
COLLINS: The president's been pushing health care, as we all know for quite a while now. What more can he do at this point?
MALVEAUX: You know, Heidi, really the strategy for the president is not so much trying to arm twist when it comes to lawmakers, give them some space, give them some time. Obviously Brianna covering that aspect of it.
The process, what the president is doing, it's an all out campaign, public relations campaign directly to the American people, taking the message of health care reform. Today we're going to see him at a town hall meeting before AARP.
They're calling it a tele-townhall, essentially he's going to be taking questions from an audience, but also phone calls, this type of thing, to highlight how health care reform will help them, a deal that was made, struck between the White House and some drug companies regarding providing a drug coverage through Medicare.
This is just one of the first of three that we're going to see in the next 24 hours. Tomorrow he is taking the show on the road, if you will, Heidi, Raleigh, North Carolina, Bristol, Virginia, once again to push forward and to make the case directly to the American people.
White House aides talk about the fact that they believe the more the president gets out there, talks directly to the American people, in very plain language that it takes it outside of this Washington setting and really does put pressure on members of Congress to respond.
That is something that they need here. You're not seeing the president yesterday making those phone calls, having those meetings with lawmakers as we saw the week before. He really wants this to kind of percolate, to put it out there with the American people and give those lawmakers the time, essentially, that they need to come up some of the back and forth of the negotiations that are taking place to find something that is acceptable for all sides, Heidi.
COLLINS: Yes. Really quickly, Suzanne, not sure if you know in the coming days and this is the older segment of the population we've learned today he's going to be talking with today. We continue that same demographic as the day continue or hit a completely different age group?
MALVEAUX: Well, it's basically going to be everybody, all folks here. Today he's focusing on senior citizens and Medicare. We have heard before he's talking Medicaid and that he's going to broaden it. He's going to talk about specifically, you know, a lot of talk about those who aren't insured, but they're going to focus on those who already have insurance, who are happy and comfortable, but who are afraid that they're going to have their taxes... COLLINS: Yes.
MALVEAUX: ... basically, increase, that somehow their own security in their system is going to be disrupted in some way.
COLLINS: Right.
MALVEAUX: That that is what a lot of the Democrats are saying they're worried about and concerned about and their constituents and that's something he's going to address in the days ahead, Heidi.
COLLINS: OK. Very good. Suzanne Malveaux for us this morning at the White House.
And a reminder here. We will have live coverage of President Obama as he takes part in that AARP call-in town hall meeting scheduled to begin 1:30 Eastern, 10:30 Pacific.
In less than 15 minutes, we're going to debut a new segment. "The Insider" with Dr. Sanjay Gupta. Today he's going to be answering your questions on what would health care reform mean to you? So make sure you stick around for that.
Meanwhile, Supreme Court nominee Judge Sonia Sotomayor is expected to move one step closer to the high court today. The Senate Judiciary Committee scheduled to vote on her confirmation in a little less than an hour.
Some Republicans on the committee say they will vote against her. But Sotomayor is still expected to win approval and have her nomination sent on to the full Senate for a vote.
Troubling new developments in the Michael Jackson death investigation. And at the center of it all, Jackson's personal physician, Dr. Conrad Murray. He was with Jackson before he died.
CNN's Ted Rowlands has the latest on the investigation.
(BEGIN VIDEOTAPE)
TED ROWLANDS, CNN CORRESPONDENT (voice-over): A source with knowledge of the investigation into Michael Jackson's death tells CNN that Dr. Conrad Murray gave Jackson the powerful drug Propofol within 24 hours of his death.
Propofol, also known as Diprivan, is normally only used in a hospital setting for sedating surgical patients.
DR. DREW PINSKY, ADDICTION SPECIALIST: For a patient to be administered Diprivan in their home or in the outside world to me is outrageous. Particularly a patient who may have had, as we all believe, an opiate addiction. That is out of the question.
ROWLANDS: Investigators, including agents with the DEA, served a search warrant at Dr. Murray's Houston clinic last week. The warrant read that investigators were seeking evidence of possible, quote, "manslaughter." Murray is not a suspect in the case, but legal experts say that may change if Propofol is found in Jackson's system.
MARK GERAGOS, DEFENSE LAWYER: Having Propofol in the system or Diprivan, as it's called, in the system, depending on what the levels are, is not a positive indicator for any doctor who is affiliated with it.
ROWLANDS: Propofol, however, is not an illegal drug.
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: It's not a controlled substance, so the fact that he was giving it to him might not have been medically indicated, but there's nothing per se wrong with it.
ROWLANDS: Murray's lawyer released a statement in response to our report saying, in part, quote, "Everyone needs to take a breath and wait for these long delayed toxicology results. I have no doubt they want to make a case. For goodness sakes, it's Michael Jackson."
Ted Rowlands, CNN, Los Angeles.
(END VIDEOTAPE)
COLLINS: Seven men are under arrest in North Carolina charged with trying to carry out a terror-style killings overseas. They include this man, Daniel Boyd, and his two sons. Investigators say Boyd attended terrorist training camps in Pakistan and Afghanistan and recruited the others to train with him in North Carolina.
There were no known targets in the U.S. Six of the seven suspects are U.S. citizens. They are due back in court on Thursday.
The defense secretary in Iraq this morning, checking the progress of the military's new mission. We're on patrol with the troops as they adjust to their new role.
KAREN MAGINNIS, AMS METEOROLOGIST: And when we come back, we'll take a look at weather conditions in the northwest. Oppressive heat, stifling temperatures, just how much longer is it going to last? And parts of Texas have seen a drought like none other.
We'll bring your details more in just a few minutes.
(COMMERCIAL BREAK)
COLLINS: Defense secretary Robert Gates is in Iraq this morning. He made an unannounced visit to U.S. troops at one southern base before heading to Baghdad for high-level meetings there.
CNN's Arwa Damon is joining us now live from Baghdad this morning with more on this.
Arwa, what are you hearing was a purpose of the stop in southern Iraq?
ARWA DAMON, CNN CORRESPONDENT: Well, the main purpose of that stop is to assess a prototype for these advisory and assist units that the combat battalions, the American combat battalions that are here, are shifting over to.
Remember post June 30th, the U.S. military terminated its withdrawal of all troops in Iraqi cities and towns. They are still there, though, in these new roles and there has been some friction generated because of this.
This is all being dictated by the security agreement that was signed by both countries, but Secretary Gates, very immature, trying to see how things are going. And we also got a firsthand look when we went out with a Baghdad unit.
(BEGIN VIDEO CLIP)
DAMON (voice-over): The agreement hands full control of this war to the Iraqis, and largely restricts U.S. troop movement. For example, the Americans now need the Iraqis' permission and help to execute this mission.
UNIDENTIFIED MALE: Yes, we pass them intelligence products that they can work on. It's a start for them. You know to hopefully detain somebody.
DAMON: U.S. forces are now in less of an offensive and more of a passive training role. Sitting on the sidelines of the battle.
On June 30th, the U.S. military completed the withdrawal of its combat troops from Iraqi cities and towns. This combat battalion is now classified as a, quote, "supervisory unit." Setting aside the logistics of trying to implement a vague agreement, it's also been a significant change in mind set for the Americans.
And the Iraqis don't have to take the Americans' advice.
LT. COL. FLINT PATTERSON, U.S. ARMY: That's right, and that's part of the difficult part of this. Because we like to think, you know, I always have the right answer, and sometimes I do, but here's the difference in terms of changing mindset. At the end of the day if they're happy with it and their systems are in place and sustainable, that's what's important. I consider it a homerun.
DAMON: American forces still maintain the full right to protect themselves. This is a perimeter patrol. They can execute on their own, but they notify the Iraqis ahead of time.
(On camera): What we've also been hearing from these American soldiers is that this has been a massive leap of faith. Because it's not just about transitioning security responsibilities, they have also had to place a significant amount of trust in the Iraqis' capabilities.
(Voice-over): And both sides say, tough as it is, it had to happen sometime.
(END VIDEOTAPE)
DAMON: And Heidi, that sometime, we are hearing might as well be now. While you still do have over 100,000 U.S. troops here to step in should the Iraqis fail.
COLLINS: All right. Very good, Arwa Damon, for us coming live out of Baghdad today.
Arwa, we'll be in touch with you. Thanks so much.
More Coast Guard rescue teams are joining the search this morning for dozens of people still missing after their boat capsized. It happened off the coast of the Turks and Caicos Islands. That's about 550 miles southeast of Miami.
At least six people are dead. Search crews have rescued 113 people so far. The boat carrying Haitian migrants had been at sea for about three days before it capsized.
A trapper, not a plumber, had to be called in to fix a clogged drain in Bradenton, Florida that's because of that guy. 14-foot python decided to call it home. It took more than an hour for the trapper and his son to charm the snake out of the sewer. He says it wasn't about to be evicted without a fight.
(BEGIN VIDEO CLIP)
JUSTIN MATTHEWS TRAPPER: It lunged at me twice, he was hissing the whole time. I hated to do it, but I did have to hit him up side the head a couple of times.
(END VIDEO CLIP)
COLLINS: Officials believe it may have been a pet and are still looking for its owner.
And transition to Karen Maginnis.
(LAUGHTER)
At the weather center. It's kind of sad, had to slap him on the head, but he looks to be OK afterwards.
MAGINNIS: Yes.
COLLINS: Big snake.
MAGINNIS: I think that would take a lot of slapping around. That's a big snake.
COLLINS: Yes. Probably. Hey, we're talking about rain and heat today.
(WEATHER REPORT)
COLLINS: Holy cow. All right. Well, you've got a lot on your plate.
MAGINNIS: Yes.
COLLINS: Karen, we'll check back with you later on. Thank you.
The battle over health care reform. Is the whole thing so complicated you can't even keep up? Well, we are going to try to help with that in just a couple of minutes. Dr. Sanjay Gupta answers your questions on how the overhaul would affect you.
(COMMERCIAL BREAK)
COLLINS: The debate over health care reform, it's enough to give you a headache. All those facts and figures and all the different plans. So I want to take a moment here to give you some clear answers.
Our chief medical correspondent Dr. Sanjay Gupta is taking your questions. In fact, this is the debut of a new segment that we're going to be doing right here in the NEWSROOM called "The Insider."
So, Sanjay, here is the first question.
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: OK.
COLLINS: Go ahead and listen to Linda from Dallas.
GUPTA: All right.
(BEGIN VIDEO CLIP)
LINDA, CALLER FROM DALLAS, TEXAS: Hello, Dr. Gupta. I'm Linda from Dallas, Texas. My dad had prostate cancer and I suffered complications during pregnancy. Both of us benefited from procedures that technically were not classified as standard of care.
Who decides what procedures are standard versus, quote-unquote, "experimental"? If the House health bill passes, will they only cover the cost of standard procedures?
(END VIDEO CLIP)
COLLINS: Great question. Answer?
GUPTA: Well, you know, first of all, even today as we're talking, some of the details of this bill are still being crafted.
COLLINS: Yes.
GUPTA: So the right answer is we don't know yet how this is going to look in the end. And also this whole idea of, are people satisfied with their government insurance? For example, Medicare, or are they not satisfied. There's been a lot of surveys about this that sort of contribute to this discussion, as well.
For example, you look at a survey from the Commonwealth Fund. They say only 8 percent rate Medicare coverage as fair or poor. And most of the other people think it's pretty good. Some even rating it as excellent. So that's a good starting point, but to Linda's question specifically, Heidi, is this idea that how will my life change?
COLLINS: Yes.
GUPTA: What's going to be different...
COLLINS: That's what everybody wants to know.
GUPTA: That's what they want to know. So take -- we gave some specific examples regarding, you know, commonly done procedures. The more commonly done procedures, for example, Pap smear.
Medicare on average will cover that once every 24 months. Many private insurance companies will cover it every 12 months. That's going to vary from private insurance companies...
COLLINS: Because you're supposed to do it every year, right?
GUPTA: And it depends in many ways if you have some sort of abnormality. And that would change it as well.
COLLINS: OK.
GUPTA: Take -- look at the next one, cholesterol and lipid. Once in every five years,. Private insurance once every 12 months. Again, different if you have abnormalities. But the question this raises, Heidi, does it make a difference to test these things more frequently? Which is a question a lot of people are trying to answer.
There was one more about virtual colonoscopies, something that we talked about on your show.
COLLINS: Yes.
GUPTA: Medicare doesn't cover that. They say there's no utility, there's no benefit, it doesn't change the outcome, but there are some private insurance companies that still cover it. So you probably will see some changes like that.
The larger question, will it maybe a difference in terms of your health to get more frequent cholesterol checks? To have virtual colonoscopies.
COLLINS: Preventative care. It should, right? That's the idea.
GUPTA: Well, I mean...
COLLINS: That's the idea.
GUPTA: That's exactly what they're going to study in trying to figure out what is the likelihood that one of these things is actually going to benefit your life?
COLLINS: OK. Understood. But who, exactly then gets to decide what will be classified as medically necessary or not?
GUPTA: Right, so right now, there is a committee made up of 17 health care professionals that determine reimbursement rates, which ultimately decide a lot of this because hospitals aren't getting paid for it, they're less likely to order the tests.
So that's what happens right now. What President Obama has talked about is an executive-level agency that sort of looks at this issue, has a lot of people who make recommendations based on what seems to work.
COLLINS: And so wait, executive level, meaning not physicians or like...
GUPTA: No, they would still be health care professionals but they would be at the executive level of government. So reporting to the White House.
COLLINS: I see. I'm sorry. OK.
GUPTA: Making recommendations to the White House and then they would take those things under advisement and try and figure out whether or not, you know, it makes sense to add more care for something, take away coverage for something else, all of it sort of saying, look, we want to subsidize what works.
We want to subsidize things that we think make a value in terms of someone's longer life, better life. The critics will charge, as I think you may be about to say, that that's government getting in the way of the doctor-patient relationship.
COLLINS: Well, that's certainly -- I would imagine, part of, you know, the argument. But then also, a lot of these things that we talk about, we just mentioned this preventative care idea, haven't been studied. Like what are you going to base those decisions on? Where's the research to show this makes this better?
GUPTA: That's right. And it's hard to study and you know, people will say prevention means more screening, but that's not always the case. Simply doing more screening doesn't -- isn't always the best form of prevention.
Should we be subsidizing, you know, athletic coaches to go into people's homes? Nutritionists? Things like that. That's where prevention as well. I don't know how a lot of that will play out.
COLLINS: Yes. Yes. All right. Well, hey, I love this. You're "The Insider" you.
GUPTA: Keeping going. There's a lot to talk about.
COLLINS: We explain, quickly, the reason why we call it "The Insider" is because Dr. Sanjay Gupta worked with the Clinton White House in developing some health care policies.
GUPTA: Yes, I was a few years after '93 and '94, but obviously, you know, strong interest and this is a position in...
COLLINS: Exactly. Inside there. All right, very good. Thank you, Sanjay.
GUPTA: Thanks, Heidi.
COLLINS: Appreciate that. Their country owns more than $1 trillion of our debt, our country, very critical of their human rights record. So what to do? Now U.S. and Chinese officials are in the same room together, but will their talks really accomplish anything?
(COMMERCIAL BREAK)
ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.
COLLINS: The opening bell just about to ring on Wall Street, and for the second day in a row, we have new numbers on the state of the housing market. Yesterday you may recall quite a surprise there. Will today's report be as good as yesterday's?
Susan Lisovicz at the New York Stock Exchange with that and a preview of all of the action on Wall Street today. Hey there, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Good morning, Heidi. And we remember vividly that surprise that came, I guess, 30 minutes after the opening bell, but yes, we have more news from the housing market.
A report out at the top of the hour shows home prices may be stabilizing. According to the S&P and Case Shiller Home price index, prices in the nation's 20 largest cities declined 17 percent in may compared to the year before. But for the fourth straight month, the pace of decline is slowing, and Heidi, get this, prices actually rose from the month before.
It's the first time that's happened in nearly three years. Prices, of course, are down substantially, but the fact that we're seeing prices inch up is yet another sign along with indications we've seen elsewhere, pending home sales, new home sales, existing home sales, that this very troubled area is starting to see improvement.
Meanwhile, what else we're watching, Bank of America planning big cutbacks, the "Wall Street Journal" says the bank is planning to shrink its branch network of 6,000 banks by 10 percent, no word on when the closures will occur.
We have new proof that it's not just American automakers that are struggling. Toyota's local sales fell more than 25 percent in the first half of the year. Still Toyota sold enough cars to retain its title as the world's number one automaker. It also makes the Prius.
Consumers aren't buying high-end handbags either. Coach says its quarterly profit fell more than 30 percent from a year earlier. The leather goods retailer has been cutting back a bit on the amount of higher-priced bags and accessories it sells and unveiled its more affordable Poppy handbag line late last month.
We hope our colleague Poppy Harlow gets some royalties on that. Meanwhile, Coach shares are down five percent. And we're seeing a little bit of giveback in the first minute of trading. But, remember, we closed the day out yesterday at the highs of the year. And we've had quite a win streak.
Heidi, back to you.
COLLINS: All right, Susan, sounds pretty darn good, in fact. I think we should talk a little bit more about it. We will check back with you a little later on. Keeping our eyes on those numbers, of course. But the housing market is stabilizing, at least a possibility of that. Very interesting to a lot of people and certainly the overall economy here.
Gerri Willis, our personal finance editor is joining us now to talk a little bit more about this.
All right. So, Gerri, yesterday, we saw that big number, pretty much of a surprise I think to everybody by way of new home sales. Now, today, another indication maybe, just maybe there's a little bit more of a stabilizing factor here in the housing market.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Right. And I can't tell you what good news this is for homeowners across the country, Heidi. The fact that home prices not just going sideways, but actually increasing month to month, that is very good news for American homeowners out there, many of whom are underwater in their mortgages. They owe more than their house is worth. Any sign of stabilization is good news for them. Let me tell you about one of the cities that's actually showing improvement here, and there are 13 metro areas that did in this Case-Shiller S&P 20-city index. Cleveland gained four percent.
Now, when we say home values, what we're talking about is prices. And that's critically important to your bottom line. What your home is valued at. What your equity is in that home. If that can improve, we're going to see an improvement in the bottom line of consumers all across the country.
And, of course, as we say here, this is one month. Obviously we want to see a repeat on this. But we spoke yesterday about how new home sales were seeing improvement. The best numbers in nine years, and this on top of that would seem to suggest that the housing market is really stabilizing, poised here for a slow, but true recovery that would mean so much to consumers out there.
One of the big things -- big questions out there that remains and could set us back in coming months....
COLLINS: Yes?
WILLIS: Unemployment. That's the old-fashioned way...
COLLINS: Absolutely. WILLIS: ...that people go into foreclosure. They lose their homes because they lose their income so they can't make their payments. So we're going to have to keep an eye on that. But I have to tell you, one of the things that's so encouraging about this is there is a lot of criticism about the president's plan making home affordable. That it isn't getting enough traction. It's not doing enough work.
So we're seeing these improvements without really a huge benefit from the president's plan. Which is, which is very good news indeed. Maybe the market out there is finding its bottom and recovering, that's what all homeowners are hoping for.
COLLINS: Yes, absolutely. Forgive me if I'm totally cautious, though, because like you said, one month. So we'd love to see a couple more months in a row, definitely.
(CROSSTALK)
WILLIS: We'll keep scouring the numbers for you, Heidi.
COLLINS: Yes. Please.
All right. Gerri Willis, our personal finance editor. Nice to see you. Thanks.
WILLIS: My pleasure.
COLLINS: U.S. and Chinese officials sitting down for a second day of policy talks in Washington. Now security and the environment are coming up in these discussions. But it is the economic haggling that could have the most impact if there's any impact at all.
Peter Morici is a professor at the international business at the University of Maryland. He is joining us live from Washington.
You know I always have to say "Go Terps" to you before we start anything.
PETER MORICI, PROFESSOR OF INTERNATIONAL BUSINESS, UNIVERSITY OF MARYLAND: Good morning.
COLLINS: Nice to see you, Peter.
Listen, I was really fascinated by some of these discussions yesterday that were going on, because I'm not altogether sure that everyone understands the imperative relationship between the United States and China.
Why?
MORICI: Well, essentially Chinese are largest customer there. We are their largest customer. And so, it's very significant in that regard. They finance our debt. We buy their goods. So we need to get it right. Unfortunately, trade is at a balance. China exports the United States almost five times more than it imports, and this creates an enormous drag on the U.S. economy. And China has been subsidizing its exports and undervaluing its currency, which is hastening the end of the recession in China, but lengthening the recession in the United States.
COLLINS: Yes, because, you know, you've actually said this. Nothing is more important to a sustainable U.S. economic recovery than recalibrating trade with China. That may leave some people going, what do you mean? I mean, we trade a lot with China. Everything says "Made in China" on it.
What's the real situation?
MORICI: well, we don't pay for what we buy from China by making things here and selling them to China. Instead we borrow money from China and that gets cycled through. You know, they buy bonds. It becomes mortgages and we bid our houses up, and we have a bubble and all that. And then we have the collapse we've had.
Now, Mr. Summers and the White House is quite correct when he says we have to have an export-led recovery, and Americans need to borrow less.
Fine. But if we're going to do that, if we're going to do that, then the country that we buy the most from has to start buying from us. But China simply doesn't want to do that.
You know, one of the most popular products in China are Buicks, American Buicks, but they won't let General Motors sell Buicks in China that are made in Michigan. General Motors is essentially required to make them in China and to move its suppliers there. That's what doesn't work.
COLLINS: Yes. Well, that's one of the issues. And then also as you're mentioning, you know, China being one of the U.S.'s largest creditors, probably the largest. It's bought more than something like $800 billion in treasuries.
What if they decide they just don't want it anymore? I mean, what are the options?
MORICI: Well, each -- they don't have a lot of options. Each month because they undervalue their currency, they have to print you on, and sell them for dollars.
COLLINS: That's their denomination we should say. Yes.
MORICI: Yes, their currency. They sell their currency to us and they buy dollars to keep the currency low. They flood the market. Well, they have these dollars. What do they do with them?
COLLINS: Right.
MORICI: They have so many dollars, they can't invest them any place other than to buy treasuries. So if they didn't buy the treasuries, that would simply take the dollars they buy out of circulation. And the Federal Reserve could turn around and put them back into circulation by buying the treasuries China doesn't buy. And the net effect would be China would have pictures of George Washington that don't earn interest and the Federal Reserve would have the bonds that do earn interest, then it would give the interest back to our Treasury.
So in the end of the day, we'd get the debt for free. Now, the Chinese don't have us by the throat. Unfortunately, it's sort of group think in Washington of some kind that they do. And the Obama administration just doesn't want to listen to arguments that we do not -- the Chinese don't have leverage on us the way they think they do. It's the old story. If you owe the bank $1,000, you got a problem. But if you owe the bank $10 million and you can't pay, the bank's got the problem. China's got the problem, not us.
COLLINS: Very, very quickly before we let you go, this is the second day of these meetings.
Is anything going to happen?
MORICI: Not on the economic or environmental front. Until we put real pressure on China, China is going to keep exporting its recession to us. On the security front, there'll always be progress because their interests and ours are quite aligned.
COLLINS: All right, very good. We will continue to watch this issue very, very closely. So important to the overall economy here.
Peter Morici of University of Maryland. Thanks for your views. Appreciate it.
MORICI: Take care.
COLLINS: Raise your hand if you want to save money. There are always some great buys at the end of summer, so we're going to take a look at a few of those bargains coming up right here in the CNN NEWSROOM.
(COMMERCIAL BREAK)
COLLINS: Former falcons quarterback Michael Vick back in the NFL. It just remains to be seen if any team will pick him to play. Vick was reinstated on a conditional basis yesterday and could be in a game as early as October. Vick served nearly two years in federal prison for bankrolling a dog fighting ring and he still has to serve three years of probation. He also filed for Chapter 11 bankruptcy.
So that is the question today, and we want to know your thoughts on it. Should Michael Vick be allowed to come back and play in the NFL?
Well, what we want to do is go to the Heidi Mac and remind you of how to get on here and give us your comments. I want to know what you think on everything. But today this is the question -- cnn.com/heidi, and then just hit on the comments button. And we will get some of these responses out on the air a little bit later on in the show. Also, if you are more of a telephone kind of person, you can call in your thoughts to the brand new hotline to Heidi number, 877-742- 5760.
If you are looking for a great deal, timing is usually everything. Our personal finance editor Gerri Willis is here now to tell us how we can save money just by knowing the best time to shop.
So what deals are out there right now, Gerri?
WILLIS: You know, it's all about the calendar. You may already have been seeing sunscreen and picnic baskets selling at discounts, but that's not the only thing you can get.
Furniture right now is hugely discounted as much as 50 percent. And I don't know if you've been to one of these stores recently, Heidi. But let me tell you. They really want to move products.
COLLINS: I'm taking notes right now.
WILLIS: Yes. Right. You can really negotiate, too, if you don't like the price of the discount that you see. Patio furniture, grills are typically discounted as the end of summer approaches. It's a great time to buy that. And if you planned your purchases right in a warmer climate, you can still get a couple of good months of use out of those bargain lawn furniture, chairs, so you want to think about that, too.
COLLINS: Yes. Don't tell my husband about the grill thing, because if we have one more grill in our lives, I'm going to lose my mind.
WILLIS: I love that.
COLLINS: All right. Let's talk a little bit more about these major purchases, though. When is it the best time to buy a car? Remind everybody.
WILLIS: Right. You know, we talk about cars that -- clunker cars and the president's deal and all that, but what you really want to do if you have your mind on a specific car out there, you buy in the fall. That's because automakers release new models and dealers want to get rid of last year's leftovers.
COLLINS: Yes.
WILLIS: Right. So you go in the fall. For an even better deal, go at the end of the month like in September. Dealers are under pressure to hit their monthly sales target. You can fine tune your timing even more by shopping when the dealerships are not crowded like early mornings or mid-week. You get a lot of attention, then you'll be able to negotiate the deal you want.
COLLINS: Yes. Saturday not so good usually when they have the free popcorn and the balloons and stuff.
WILLIS: No.
COLLINS: All right. Any back-to-school deals now on the radar? Or are we pretty close?
WILLIS: Yes. Well, we know, you know, people are going to be spending a lot on back to school. It's one of the best times, though, typically to score a good deal on a computer. This year is no different. But thanks to the rollout of a new windows operating system in October, you may find even steeper discounts on computers that won't have this technology according to experts.
Wal-Mart has increased its stable of affordable notebooks. To keep your own tabs on the prices of specific laptops, go to fatwallet.com. That's really the name of it -- fatwallet.com.
COLLINS: I like that.
WILLIS: And techbargains.com. So check out those deals. It's really all about the calendar. And if you time your purchases, you can really save money, and that's what we're all about right now.
COLLINS: You know, in fact, we go back to school as I'm hearing in less than two weeks?
WILLIS: Oh, my God.
(CROSSTALK)
COLLINS: No. I say I got to get out there, get the deals, quick.
WILLIS: You don't have a lot of time.
COLLINS: That's true. All right.
Gerri, appreciate it, thank you.
WILLIS: My pleasure.
COLLINS: Police say a woman went on a crime spree in a small southern town, but it was what she was wearing that really caught everybody's attention.
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COLLINS: New developments in the Michael Jackson death investigation. A source close to the case tells CNN, Dr. Conrad Murray gave Michael Jackson the powerful drug, Propofol, within 24 hours of his death. Propofol also known as Diprivan is normally only used in a hospital setting to sedate surgical patients.
Anderson Cooper talked with addiction specialist Dr. Drew Pinsky last night on "AC360" about the case.
(BEGIN VIDEO CLIP) ANDERSON COOPER, CNN CORRESPONDENT: Dr. Drew, when you heard that Michael Jackson had an anesthesiologist on tour with him back in -- on -- during the History Tour, did that make any sense to you?
DR. DREW PINSKY, AUTHOR, "CRACKED: PUTTING BROKEN LIVES TOGETHER AGAIN": No. What I thought was, uh-oh, this is a very serious problem.
Look, even an anesthesiologist should not be prescribing this medicine outside of a hospital, and certainly not for insomnia, and certainly not with an addict history. It's really just something that is just, unfortunately, really outlandish.
(END VIDEO CLIP)
COLLINS: Murray's attorneys released a statement yesterday and said they would not comment on rumors, innuendo, or unnamed sources.
Police in Mississippi arrest a woman accused of carjacking and robbery. So what's the big deal? Well, it turns out, all she was wearing during this alleged crime spree was a bikini.
Reporter Nick Kenney from our affiliate WMC has more now on the woman dubbed The Bikini Bandit.
(BEGIN VIDEOTAPE)
NICK KENNEY, WMC CORRESPONDENT (voice-over): Straight from an evaluation at the Emergency Room, Morgan Hailey's wearing a hospital gown in her mug shot. But at the time of her alleged crimes, she wasn't wearing much at all.
What was she wearing?
UNIDENTIFIED POLICE: A bikini.
KENNEY (on camera): That's right. She's charged with carjacking and attempted robbery all while wearing a two-piece bathing suit.
(voice-over): Thursday afternoon, Hailey showed up on Donald Drive wearing her bikini. South Haven Police say she walked up a stranger's driveway, claimed to have a gun, demanded the woman's keys and stole her car. She allegedly drove around the block to the Southaven RV Super Center, claimed to have a gun again and tried to rob the place, all while wearing her bikini.
Employees didn't believe she had a gun so they tackled her, holding her in place until police showed up.
UNIDENTIFIED POLICE: We've arrested bikini-clad suspects before, but not in the commission of a car jacking or robbery. Yes, this one was a little usual.
KENNEY: Hailey told police she lives at this two-lane road address. No one answered the door for us, but there's a pool in the backyard. The house is 3.5 miles from the carjacking, where neighbors like Jim Sanders say neither crime nor skin are commonplace.
Are there random girls wandering around your streets in bikinis?
UNIDENTIFIED MALE: No.
KENNEY: Now, though, this street plans to keep eyes peeled, should the bikini bandit strike again.
(END VIDEOTAPE)
COLLINS: Police say Hailey appeared to be under the influence of drugs or alcohol at the time of the carjacking and attempted robbery.
Well, these are tough turns to get over to you. Karen Maginnis is standing by in the weather center now to talk a little bit more about -- looks like Texas you have there -- Oklahoma, Oregon, and hot, hot, hot, everywhere.
(WEATHER REPORT)
COLLINS: OK. Well, good luck everybody down there.
Thanks so much. Appreciate it, Karen. We'll check back later on.
We do have a lot going on in the NEWSROOM in the next hour. Our crews are in place to bring it all to you.
In fact let's check in first with Brianna Keilar on Capitol Hill this morning.
Forgive me, it doesn't look like we have Brianna Keilar in that three-shot, does it?
Susan Lisovicz, let's start with you, instead. How's the market looking?
LISOVICZ: The market is not looking so good, but you know what's really looking good or I should say better, Heidi, is the housing market.
For the second day in a row, we are digesting a report that shows the housing market is finally, finally stabilizing. Yesterday, it was home sales. Today, it's home prices. I'll have all the numbers, Heidi, in the next hour.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I'm Christine Romans in New York. And I'll a story for you about the cost of those calories. It costs more than just to your waistline or buying a new pair of jeans. Why calories and what we weigh figure into the debate over reforming health care. I'll have that at the top of the hour.
ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: I'm Arwa Damon in Baghdad. Secretary of Defense Gates is in Iraq on an unannounced visit, specifically to look at the new dynamics between the U.S. and Iraqi soldiers. We'll have that story coming up next hour. COLLINS: All right. Thanks so much, ladies. Appreciate that.
And Brianna Keilar, I just want to let you know, is on Capitol Hill talking about health care today, and what the next plan may be.
Also, a story that will get just about everybody talking. Paying for illegal immigrant's health care. What's the deal now, and will it change?
(COMMERCIAL BREAK)
COLLINS: Inviting the Taliban to the table, a tricky prospect. But as Nic Robertson explains, the British want to see more talking and less fighting in Afghanistan, even after declaring a major victory there this week.
(BEGIN VIDEOTAPE)
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): Operation Panther's Claw began five weeks ago in a blaze of publicity. One of the biggest air assaults in British history. It has ended. Ten soldiers died, but it is being hailed a success in advance of Afghanistan's presidential elections next month.
LT. GEN. SIMON MAYALL, DEPUTY CHIEF, BRITISH DEFENSE STAFF: We have brought back into, as potential, electors, voters between 80,000 and 100,000 of the Afghan population in the Helmand River Valley. We brought back, and we intend to keep under our control, a very large and significant economic sector.
ROBERTSON: Within hours of the announcement and barely a few dozen miles from the battles of Panther's Claw another 2 British soldiers were killed. Twenty-two this month. 191 since the war began. The British people told to expect more.
DAVID MILIBAND, BRITISH FOREIGN SECRETARY: Though we know recent sacrifices will not be the last. And we also explain the seriousness of the security situation in Afghanistan.
ROBERTSON: In Britain, the burden of the eight-year war, not just Panther's Claw, is being keenly felt. At times nearly continuous funeral corteges bringing the dead home from battle have cut deep into the national will to fight the Afghan war. The foreign minister offering a new approach.
MILIBAND: We will not force the Taliban to surrender just through the force of arms and overwhelming might. Nor will we convert them to our point of view through force of argument and ideological conviction.
ROBERTSON: But at the same time, Afghan President Hamid Karzai was doing just that, making a deal with the Taliban in a remote proves. Its success was called into question when battles broke out soon after. The Afghan leader has been under international pressure to talk to his enemies. Increasingly U.S. commanders, too, see this as an important part of the way forward. GEN. DAVID PETRAEUS, U.S. CENTCOM COMMANDER: You can't kill or capture all the insurgents there. You have to have reconciliation and certainly the effort will go forward in the local level to do that over time with, you know, some principals and concepts that are applied in concert with our Afghan partners.
ROBERTSON (on camera): When I met recently with one of the Taliban's loose allies in the war in Afghanistan, he told me that talks were necessary, but don't expect a lot of long, behind-the- scenes secret negotiations. Its warning to Britain and the United State, they should have studied their history before coming into Afghanistan. His point was the Afghans have never been defeated.
Nic Robertson, CNN, London.
(END VIDEOTAPE)
COLLINS: Less than a month until Afghanistan's presidential elections. And today, gunmen opened fire on a campaign team near Kabul, killing a bodyguard and wounding another worker. The team works for Abdullah Abdullah, the former foreign minister. One of his campaign managers was killed in an attack a month ago, you may remember. On Sunday, one of the incumbent President Hamid Karzai's running mate survived an ambush.
