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Breakthrough in Unemployment?; Deadly Moscow Subway Attacks; President Obama's Unannounced Visit to Afghanistan
Aired March 29, 2010 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: Here are some of the big stories we're following for you in the CNN NEWSROOM for this Monday, March 29th.
Jobs, jobs, and how about this -- more jobs? Could employment be on the rise with small businesses taking the lead?
And this --
(BEGIN VIDEO CLIP)
HOWARD SCHULTZ, CEO, STARBUCKS: What I realized more than ever before is that a company's purpose and the leaders of that company have a far greater purpose than just making a profit.
(END VIDEO CLIP)
HARRIS: The CEO of Starbucks on what is really needed now in business.
And this --
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Why would "Negro" be there? It should be "African-American."
UNIDENTIFIED FEMALE: When you hear the word "Negro," what do you think?
UNIDENTIFIED FEMALE: Slave.
(END VIDEO CLIP)
HARRIS: Wow. Race terms on the Census forms prompting strong reaction.
Good morning, everyone. I'm Tony Harris.
Those stories and your comments on all of the day's news right here, right now in the CNN NEWSROOM.
Could March be the month for a breakthrough in the job market? Some economists are predicting job growth when we get the March employment numbers this week. After losing millions of jobs since the start of this recession, we could actually see the economy starting to add jobs?
Christine Romans of our CNN Money Team live from New York.
Wow, Christine.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's what they say. That's what they say.
HARRIS: Put this in some perspective for us, context.
ROMANS: Well, they are looking for 190,000 jobs created potentially in the month. We're going to find out on Friday for sure. But economists are starting to say this is the turning point. It's really happening, is what Peter Morici from the University of Maryland says.
This is what it would look like, Tony. This is -- look at this job market.
This would be the slowly climbing out of the hole. A year ago we were losing more than 700,000 jobs a month. This would be the creation of 190,000 jobs.
Just to put it in context for you, Tony -- and you and I have talked about this a lot -- you have to create 100,000 to 150,000 jobs every month just to absorb new people in the labor market. So, if you got 190,000 jobs, that means you'd be putting 40,000 people back to work who lost their jobs of the eight million in the recession. So that's the context. But they are calling it a turning point and they think that maybe we have hit it.
HARRIS: Would this begin to allay some of the concerns that we might be looking at a double-dip recession?
ROMANS: That's a good question, because you're starting to see corporate profits come back. That's why the stock market is up 1,000 points almost in 45 days. And a lot of people say that eventually that will translate into hiring.
A lot of economists that I've talked to this morning say that now the chance for a double-dip recession is one in five, maybe two in five, and that the more jobs you create, the more you sort of tamp down those worries about double dip, because when you've got people working, they're paying taxes, they have money, they're paying their mortgage, they're moving money throughout the economy and the like. So that's the hope at least.
HARRIS: Is it too early to know or even predict what sectors might be leading the way here?
ROMANS: We can tell you what's already been leading the way. It's been education, it's been government, it's been health care jobs.
And you're going to hear -- we are supposed to create, like, a half a million health care jobs, maybe more than that, a half a million health care jobs, and home health aides, hundreds of thousands of home health aides. Remember, health care is so big, Tony, some of these jobs make $19,000 a year. Some make less than that.
HARRIS: Right.
ROMANS: Some make much more than that, $100,000 a year if you're at the very high end of physical therapy. So, be careful about where you're seeing the bulk of this group.
One thing we know is that we've created a lot of low-skilled jobs that don't pay as well as the manufacturing jobs we've lost over the past 10 years. And that's a big issue here. What's the quality of the jobs going to be coming back?
Tony, we have also talked about permalancers, contract workers, independent contractors. You finally get a job offer and the boss says, you're going to be a contract worker for us. We're not handling your health insurance, your 401 (k), or anything else. That's about 30 percent of the workforce right now.
HARRIS: And we were also anticipating a bit of a pop here as the government ramped up employment to handle the Census reporting, correct?
ROMANS: All in all, that should be more than a million workers. And we're going to see that, I think, March, April, May. You're going to see Census hiring.
The other government hiring you have been seeing is, frankly, stimulus money being put to work, government jobs, big projects. Some economists will tell you that long term, that's not good for the economy, to have the government being the -- you know, you want private businesses hiring people and growing. And that's what we're trying to get.
But the bleeding has stopped, and that's what this turnaround is about. If you do get jobs creation here, that would be a big sign to economists that the bleeding in the labor market has stopped.
HARRIS: Wow. Let's follow this. Did not want this day to pass without looking ahead to the big jobs report and what the economists are saying about it.
ROMANS: Sure.
HARRIS: Christine, appreciate it. Thanks for your help on it.
ROMANS: Yes.
(NEWSBREAK)
HARRIS: More now on one of our big stories of the day, the deadly suicide attacks on the Moscow subway system. Russian investigators say the attacks were most likely the work of Chechen rebels.
Senior International Correspondent Matthew Chance live from Moscow now with more on that part of the story. If you would, Matthew, walk us through what happened.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, Tony, it is incredible, I want to say first, how quickly a city like Moscow manages to pick itself up after such a huge double blow that it suffered this morning.
The metro station which was first attacked in the rush hour this morning, it's right behind me now. Within the last hour or so, it's reopened, and people are going back from their work to their homes in this rush hour, again, in the evening, as if nothing happened. But, of course, that couldn't be further from the reality, because this morning was very chaotic, very bloody, indeed.
Two suicide bombers detonating their suicide belts on this metro station here in Lubyanko (ph), in the center of Moscow, at another metro station as well on the same line just a short distance away, killing 38 people in total. Another 63 people still in hospital. Some of them, as you can imagine, with very grave injuries, indeed.
There has been no claim of responsibility for these attacks. We had some information earlier, but that was incorrect. But the authorities are saying very clearly that they believe this to be the work of rebels from the very volatile North Caucasus region of Russia, the Chechen Republic, other surrounding Russian republics where there's been a long-running insurgency there. And so that's where the focus of this investigation now is looking -- Tony.
HARRIS: OK. Matthew Chance for us.
Matthew, appreciate it. Thank you.
We will explain more about the Chechen/Russian conflict a bit later for you here in the CNN NEWSROOM.
The commander in chief, meanwhile, tells his troops, "You inspire me." A live report on President Obama's visit to Afghanistan.
And the stormy East. A tornado in Florida this morning. Rob Marciano -- where's the man? There he is -- is tracking weather for us.
But first, the latest numbers from the New York Stock Exchange. The Dow up. It's a good start to the day. We're up 51, 52 points.
We are following these numbers for you, of course, throughout the day, right here in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: Fresh from the war zone, the commander-in-chief now back in Washington after an unannounced visit to Afghanistan.
Our Chris Lawrence live in Helmand Province.
Chris, good to see you. There is the president, I believe back today in Washington. What was the reaction from the troops to the president's visit?
CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, I've got to tell you, Tony, down here in Helmand Province, not much of a reaction. Some of them were headed out on patrol when we all heard the news, and they kind of shrugged their soldiers and said, "Well, I doubt if he's coming down to a base like this." And that's true, because while the north is more stable, a little more safe, down here it is still very dangerous.
One of the things that President Obama pressed President Karzai about was to try to curb the production of opium, the drug that is fueling and sort of financing the insurgency. Well, some of the Marines I spoke with also share that frustration.
They're not allowed to go after these poppy fields because it would turn the farmers against them. I was at a pretty remote base last night, and just -- you could see farmers openly growing this opium, 300, 400 meters from the Marine Corps base. The Marines say every few days they see the Taliban come by, hack off a few of the bulbs, take them up north, sell them as heroin, and there's your money for the insurgency.
So, some frustration on that part. But, again, when President Obama addressed the troops, he told all of them basically to keep the faith.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There is no visit that I considered more important than this visit I'm making right now, because I have no greater honor than serving as your commander-in- chief. And it is a privilege to look out and see the extraordinary efforts of America's sons and daughters here in Afghanistan. So my main job here today is to say thank you on behalf of the entire American people.
(END VIDEO CLIP)
LAWRENCE: And I can tell you a lot of the Marines here in Nawzad, where we have been for the past few days, tell us they feel very, very motivated. They feel like they are making a real connection with the locals here, and it's starting to really earn their trust -- Tony.
HARRIS: And Chris, what of the politics of the trip? What, if anything, came out of the president's meeting with Hamid Karzai?
LAWRENCE: Well, he pressed President Karzai on dealing with the corruption in his own government. That was the open door that allowed the Taliban to come into areas like Helmand Province, because the people just felt they had no credible government that they could trust.
Well, I'll tell you a quick story. The way normally that tribes down here settle their disputes is one of two ways -- death or a young girl, a daughter of one tribe is given over to the other tribe to sort of settle the debt. Well, a few weeks ago, two tribes had a dispute, and the Marines tell us that they actually went to the local government to settle it. Now, that's not the kind of headline that shows up on the front page of CNN.com or "The New York Times," but it was a watershed moment for the work that the Marines have done here to get people to start to trust in local government.
HARRIS: All right. That sounds like real progress, hearts and minds progress.
All right. CNN's Chris Lawrence in Helmand Province for us.
Chris, appreciate it. Thank you.
President Obama's top domestic priority, health care reform, is a done deal. So what does he turn his attention to now: A, jobs and the economy; B, the wars in Iraq and Afghanistan; C, immigration; or, D, financial industry reform?
We want to hear from you. Go to CNN.com/Tony, and let us know what you think the administration should make its top priority moving forward. We will share some of your comments on the air, right here in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: So, you know, Friday brought potentially big news for troubled homeowners. The Obama administration rolls out a new plan to help more Americans get mortgage modifications, especially those who have lost their jobs or are under water on their loans, meaning they owe more than their home is worth.
Our Ines Ferre is here with some tips on how to take advantage of the government's help for homeowners.
And I've got to tell you, those numbers of homeowners who are in trouble here with their mortgages, it's pretty startling.
INES FERRE, CNN CORRESPONDENT: It's huge. I mean, it's estimated that almost one in four American borrowers are under water.
So, if you're struggling to make your mortgage payments, the mortgage modification could be a way to avoid foreclosure. In a modification, your lender makes a change to your original mortgage agreement so that you can keep making monthly payments either by lowering the interest rate or stretching out the length of the loan.
Now, in some cases, Tony, your lender may be willing to forgive a portion of the loan principal. With the Home Affordable Modification Program in place, eligible borrowers would have their monthly payments reduced to no more than 31 percent of their pretax income.
Now, to qualify for HAMP assistance, you must own and live in your home, have a mortgage balance of less than $729,750, and your current monthly mortgage payments must be more than 31 percent of your monthly income. And for a full list of qualifications, head to makinghomeaffordable.gov -- Tony.
HARRIS: So, that's good information. Anything homeowners, Ines, should be a little bit wary of?
FERRE: Yes. Well, you know, unfortunately, there are a number of mortgage modification scams out there. And it's really important for homeowners to be sure they are getting reliable help from a counselor who is knowledgeable about loan modifications.
The government provides this assistance for free. And you can call 1-888-995-HOPE to speak to a HUD-approved counselor. And if you think that you have been a victim of a scam, file a complaint with the Federal Trade Commission by calling 1-877-FTC-HELP.
And, of course, any questions, send them to us at cnnhelpdesk@cnn.com.
HARRIS: I've got to tell you, if you watch television at all, you see all of these ads for these companies that are helping you and promising they can help you with a loan mortgage modification, and you just don't know who to trust. So --
FERRE: You have to be careful.
HARRIS: You really do. So good tips. Thank you, lady. See you next hour.
FERRE: Thank you.
HARRIS: A weather mess left behind in North Carolina. They are checking on damage and injuries after severe storms slammed the state.
We're back in a moment to update this story for you right here in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: Let's get you caught up on our top stories right now.
Moscow is a city in shock following a pair of deadly rush hour attacks on its busy subway system. At least 30 people were killed in packed underground stations today by female suicide bombers. Security now tightened in New York and D.C. subway systems.
Investigators are trying to find the cause of the fire at a historic ice rink in Sacramento. It was initially called in as a vehicle fire. Firefighters say when they got there, the back side of the building was in flames. The 70-year-old rink was destroyed.
We don't often do this. It's nice to do it for a change. A box office win for "How to Train Your Dragon."
DreamWorks' latest 3-D film crushed the competition, bringing in a whopping $43 million this weekend. "Alice in Wonderland," that's been out for, like, two years now, right? It came in second with $17 million.
(WEATHER REPORT)
(COMMERCIAL BREAK)
HARRIS: Got to tell you, we've learned more within the last hour about the arrest of several suspected militia members over the weekend.
National Correspondent Susan Candiotti is following this developing story for us. She's in New York.
Susan, what are you learning?
CANDIOTTI: Well, Tony, this is a real head-scratcher. We're finding out about this militia group that, apparently, according to the feds and the FBI, has been around for at least a couple of years. At least that's how long they appear to have been looking at them. Perhaps not as long as that.
But they have arrested at least nine people. The group is called Hutaree, and it's described as, according to the government, a group that is anti-government. Anti, specifically local, state and federal cops.
And the plan was that this group appeared to believe -- saw the government as "The Brotherhood," as they call them. And they wanted to go after them.
And they were trying to come up with a plan, these charges state, to lure federal agencies or officers to come to where they wanted them to by setting up -- killing one person, then a funeral would happen, and then others would come on board. And then they would throw explosive devices, homemade bombs, other kinds of mechanisms that would explode, and kill even more law enforcement officers -- Tony.
HARRIS: Any idea -- I don't know if there is a website or something that gives us a clue as to what the real grievances are here against local government?
CANDIOTTI: It's hard to say exactly. You don't see any evidence of that on the website, and you're looking at pictures from that now. But they show that they have an insignia.
It's clearly a religious group as well, because they have a number of statements on there and quote scripture. And there is one quote that we pulled from it where they say, "we believe that one day, as prophecy says, there will be an anti-Christ and all Christians must know this and prepare just as Christ commanded."
But evidently, there was other component and it's part of a militia group. We know there are a number of them throughout the United States and they seem to be on the rise.
HARRIS: OK. Susan, I know you will continue to work this story for us. Appreciate it.
Susan Candiotti in New York for us.
Terror on the Moscow subway system. Suicide bombers strike during rush hour killing dozen and injuring more. Russian authorities assign blame for the attack.
(COMMERCIAL BREAK)
HARRIS: OK, back to the story we have been telling you about this morning. Explosions ripping through subway stations in Moscow, at least 38 people are dead, dozens more are wounded. Russian security officials say two female suicide bombers carried out the attacks, they believe Chechen rebels are responsible.
CNN Atika Shubert looks at the shared history of violence between Russia and Chechnya.
(BEGIN VIDEOTAPE)
ATIKA SHUBERT, CNN CORRESPONDENT (voice-over): The list of terror attacks in Russia blamed on Chechen rebels is long. Among the most deadly -- a 1999 series of bombs at apartment blocks across Russia that killed nearly 300 people. That triggered a brutal campaign by then prime minister Vladimir Putin.
Then, the theater attack. Separatists held more than 700 people hostage in a Moscow theater. Russian forces stormed the building after pumping gas into the ventilation system, killing all 39 of the attackers and more than 120 theater-goers.
There was the 2004 Beslan school attack in. Chechen sympathizers seized a school and wired it with explosives. The siege ended in a bloodbath. When Russian troops forced their way in, more than 300 were killed, many of them children.
Now Russian officials are blaming female suicide bombers for Monday's attack, a tactic used before by Chechen rebels.
ROBERT AYERS, INTERNATIONAL SECURITY ANALYST: It's a way of reminding the world that Chechnya is still involved in a struggle for independence from Russia. It's a -- if you look at the history of what's been happening in Russia over the last decade, every year or so the Chechens will do something to remind people that this conflict goes on, and this is the latest reminder. It's very effective.
SHUBERT: Separatists in the predominantly Muslim region of Chechnya have been fighting for independence from Russia since 1991. Human rights groups estimate more than 70,000 have died in the conflict.
But it wasn't until recently that Chechen insurgents began striking terror in the heart of Russia. Russian officials claim the Chechen rebels are funded by groups such as al Qaeda, but security analysts say Chechen rebels have different goals. AYERS: The Chechens don't really care whether you have Islamic law installed in Iraq or Afghanistan or Saudi Arabia. The Chechens just want to run their own country. In many ways, the Chechen terrorist movement is much more similar to the IRA than to al Qaeda.
SHUBERT: But just last month Chechen rebel leader Doku Umarov released this video provided to CNN by security analysis group Intel Center. In it, Umarov threatens the Russians do not understand that the war today is coming to their streets, the war is coming to their homes and the war is coming to their cities, he said.
Russia is now considering what action to take, but without a political solution in Chechnya, Monday's attack in Moscow is unlikely to be the last.
Akita Shubert, CNN, London.
(END VIDEOTAPE)
HARRIS: Well, he is coming to the defense of the pope. On Palm Sunday, the archbishop of New York stepped up to the pulpit and preached, quoting here, "All you naysayers are just plain wrong," end quote. As you know, Pope Benedict is under criticism for his handling of a Milwaukee priest who admitted at molesting hundreds of deaf boys.
How did Catholics take the message?
(BEGIN VIDEO CLIP)
ARCHBISHOP TIMOTHY DOLAN, SAINT PETER'S CATHEDRAL: Certain sources seem almost frenzied to implicate the man who, perhaps more than anybody else, has been the leader in purification reform and renewal.
UNIDENTIFIED FEMALE: Short, straight, right to the point, said what he need to say. I was very touched by it. It was just what the congregation and the Catholic Church, everyone needed to hear.
(END VIDEO CLIP)
HARRIS: So here's the thing, the scandal is not keeping the faithful from the pope's doorstep. He celebrated Palm Sunday with thousands of the faithful in Saint Peter's Square. His aides say the latest allegations of sexual abuse won't interfere with his Holy Week duties.
And back in the states, the scandal has people are talking.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I'm saddened that we haven't done a better job as a church in protecting the young. But it hasn't shaken my faith in the institution.
UNIDENTIFIED FEMALE: What's happening with the Catholic Church at the moment is exploding in their face and the things that are coming out are pretty outrageous by anyone's standing.
(END VIDEO CLIP)
HARRIS: OK. The sentiment of a handful of protesters outside London's Westminster Cathedral yesterday. This demonstration was organized by a coalition of groups underneath the banner "Protest the Pope."
Coffee talk with the CEO of Starbucks. He talks about his company's philosophy and it's recipe for success.
(BEGIN VIDEO CLIP)
HOWARD SHULTZ, CEO, STARBUCKS: When I realized more than ever before is that a company's purpose and the leaders of the company have a far greater purpose than just making a profit.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
HARRIS: Checking our top stories now.
The FBI raids a southern Michigan-based Christian militia group. Nine people face charges including conspiracy and attempted use of weapons of mass destruction. According to the indictment, they were planning to attack law enforcement officers during a funeral procession. A website by the group says they are preparing for the, quote, "end of time."
(BEGIN VIDEO CLIP)
MIKE LACKOMAR, SOUTHEAST MICHIGAN VOLUNTEER MILITIA: They're gearing up to fight alongside Jesus against the forces of Satan.
(END VIDEO CLIP)
HARRIS: OK. Folks in North Carolina are tallying the damage as severe weather ripped roofs of buildings, toppled mobile homes and may have triggered as many as eight tornados. Power crews are working to restore electricity and now the northeast is under the gun.
You know, last week we told you about how Starbucks spends more on health care for its employees than it does on coffee beans. Now we want to bring you more of that interview with the CEO of Starbucks. CNNMoney.com's Poppy Harlow joins us now from New York.
Poppy, I got to tell you, I was struck by the way Howard Schultz talked to you about his sense and his company's sense of social responsibility, and by the way, we have to run a profitable company. Was there more of that?
POPPY HARLOW, CNNMONEY.COM: Yes, there is a lot. I mean it was an hour-long interview, and a lot of it talked about the business and how it's doing. But what struck me most in the whole interview was when he talked about the social responsibility, what is behind running a huge corporation which, by the way, they have to make it profitable, they have to answer to shareholders, but he says there is a big emphasis on social responsibility, what they have to do outside of just adding to the company's bottom line.
So I want you to take a look at a part of our interview. It's right near the end of the interview when he got pretty candid on this issue. Take a listen.
((BEGIN VIDEO CLIP)
SCHULTZ: What I realized more than ever before is that a company's purpose and the leaders of the company have a far greater purpose than just making a profit. And in saying that, I believe very strongly -- and I think Starbucks is a working model -- as a result of this, is that you can make sustainable profits by doing the right thing. And the right thing is doing everything you can to devote the same level of energy and commitment to those people who are being left behind.
HARLOW: How would you advise the heads of the big and the small Wall Street firms right now? Because you say it's all about this ethos and this communication, and there is clearly the biggest gap between the proverbial Main Street and Wall Street in this country perhaps than there's ever before.
SCHULTZ: You know, I -- you're putting me in a position where you're asking me to give advice to significant businesses and significant business leaders. I can't preach to them what to do or how to do it.
What I know is that the business philosophy of Starbucks -- which is not a perfect model, it's a model for us and for perhaps others to look at -- is one that works. But I think never before has there been a need for transparency and honesty and most importantly, an authenticity of behavior.
(END VIDEO CLIP)
HARLOW: And, Tony, you know, he said there is this need more than ever before for transparency and authenticity when it comes to a company. And he says Starbucks isn't perfect and this is a company that's not controversial like big banks that got a bailout. It didn't get any bailout, but we all know the company and there is more to the cups of coffee that we certainly knew before we went out there to Seattle to learn more about what is behind Starbucks. And we talked last week about the health care that they provide even for their part- time employees.
So really different company than I went into the reporting thinking.
HARRIS: And you mentioned some of the challenges. This is a company that went through a downsizing, I think it was last year, when they were closing stores all over the country, correct?
HARLOW: It was. It was last year. This is a company that a lot of folks said may not make it through the recession. You know, people like to say, $4 cup of coffee and this and that. It's a company laid off thousands of people, it closed almost 900 stores across the country, Tony. So they had sort of a wake-up call saying, how are we doing our business? How can we make it better? How can we have to change in the new economy?
But the one thing that they wouldn't give up, and we talked about this a lot, is that health care benefit for the part-time employees as well as the full timers, despite having to close stores and lay off people. Howard Schultz has been running the company since the early '80s. So a lot has changed since then, but that's sort of the pace on what big businesses need to do.
HARRIS: Is this the guy that was running the company -- right. Was he running it, left for awhile and came back? Is that part of his story?
HARLOW: Yes, that's right. He was running it, stepped aside and was just chairman. And then the company went through incredibly hard times, they asked him to come back and now he's the CEO again.
HARRIS: I wonder how the freeze-dried Starbucks is doing. I But anyway, I want to get everyone to the website to see the interview.
It's good stuff, Poppy. I appreciate it. Thank you.
If you are a homeowner in trouble and you think foreclosure is the only answer, maybe you're not asking the correct question here. Do you know what a short sale is? Stick around, we'll tell you how it works. That's next in the NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: I need you to reach out to the program, talk to me directly. A couple ways to do it. First of all, CNN.com/Tony takes you directly to this -- bam -- our blog page. To send us your thoughts on Facebook, here's what you do. Tony Harris, CNN. Here's my Twitter address, tonyharrisCNN. Call us. Pick up the phone. 877- 742-5760. Let's have more of your thoughts on the program. CNN NEWSROOM with Tony Harris.
(COMMERCIAL BREAK)
HARRIS: Let's get you to Stephanie Elam here. You know, they are called short sales and they don't sound very sexy, but they are the hottest thing going in the housing market right now and they are expected to become even more popular when a new government program kicks in next year. Stephanie Elam in New York with the details.
Stephanie, how about we do this? Let's start by talking about exactly what a short sale is.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: I think that's a lovely place to start, Tony, because a lot of people hear this term and they don't really know what the heck we're talking about.
So what it is is really a way to avoid the stigma of a foreclosure. And a foreclosure, obviously, that's when a bank repossesses your house. The difference is, in a short sale the house is sold for less than it's worth, but the homeowner is involved and still lives in the house that's at issue here.
Now, a short sale used to take an average of a year, but an now banks are approving short sales faster than ever. One real estate agent tells us that Bank of America approved a short sale in less than a month.
But it's not just the speed, it's also the fact that they're happening more often. In fact, short sales made up 17 percent of all home sales last month. And starting next week, the government will be giving banks new incentives to approve the short sales. So they are happening more and more often here, Tony, no doubt about it.
HARRIS: So look, they aren't exactly new, but why are these short sales becoming so popular right now?
ELAM: Because you've got to know when to just cut your losses and keep it moving.
HARRIS: Boy, isn't that the truth. Keep it moving.
ELAM: Keep it moving. Because the thing is, it's better for the banks if they get something for these houses. So if a bank waits for a home to go into foreclosure, it's the bank's responsibility then to maintain the property. And when the foreclosed home is eventually sold, the bank could lose up to 50 percent of the loan it originally made. But with a short sale, the loss is typically around 30 percent. So it's a way for the bank to get the loan off their books quickly.
Now, from the homeowner's perspective, if there's no way out, the sting of a short sale is not as bad as a foreclosure. A foreclosure can knock down a homeowner's credit score by 200 points, about twice as much as the penalty for a short sale. So obviously this is better for everybody. It's better for the property values. It's just better than to just have people who are just leaving their homes and letting things just go by the wayside. So obviously, we'll be hearing more about this, but something to consider instead of letting your house go into foreclosure.
As for stocks, they're getting a little bit of a boost from an upbeat report on consumer spending, and that's lifting hopes about the recovery. As you can see, we've got the green mountains there on our graph there. The Dow up 47 points. Look at that. Getting pretty close. We were just at 10,900, so 11,000 is within our eyesight now. Nasdaq up 12 points at 2,407. Of course, we'll keep our eyes on it throughout the day.
HARRIS: Dow 11,000, given where we've been? Whoa.
ELAM: I know, given where we've been. But you had to figure it would come back at some point. Now it doesn't mean that we're going to keep on the straight line. Let's just keep that in mind.
HARRIS: Right, right, right.
All right, Stephanie, see you next hour. Thank you.
ELAM: Thanks.
HARRIS: The U.S. Treasury is moving closer to selling more than 7 billion shares of Citigroup stock. Check it out, there's the story at CNNMoney.com.
Here's the stories we're working on for the next hour of CNN NEWSROOM.
CNN's Jason Carroll has been following a soldier from the day he enlisted through his basic training. We will find out where this Californian will wind up at his first station before he is sent off to war.
And Philadelphia, the city of brotherly love, cracking down on flash mobs, mobs of kids organized on the Internet that turn ugly. Who's to blame and what's being done?
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HARRIS: OK. You have just -- what? -- a few days to fill in your census or mail it back before the workers start going door to door. But the Census may have you asking yourself, who am I. Raquel Cepeda found some confusing questions of identity on the form, including one that uses a certain N-word.
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RAQUEL CEPEDA, JOURNALIST: Where you from?
UNIDENTIFIED MALE: I'm from the Bronx.
CEPEDA: Oh, really? Born and raised?
UNIDENTIFIED MALE: Yes, born and raised. My parents are from Honduras, though, but that's a different story, another different time.
CEPEDA: Under here, under the person's actually race, not your ethnicity, but your race, what would you pick from white, black, Indian --
UNIDENTIFIED MALE: I'd put African-American.
CEPEDA: African-American?
UNIDENTIFIED MALE: Yes.
CEPEDA: Cool.
UNIDENTIFIED MALE: You're talking about after I put Hispanic stuff?
CEPEDA: After you identify --
UNIDENTIFIED MALE: Yes, yes. I put African-American.
CEPEDA: Are you at all confused by the racial categories that are offered to Latinos in the Census?
UNIDENTIFIED FEMALE: Absolutely. Because there are a lot of African and there are a lot of black that are Latino and Hispanic. What I also see very interesting is underneath the Hispanic, Latino or Spanish origin, you've got a Mexican, Chicano, Puerto Rican and a Cuban slot. So, you know, I was born in Puerto Rico, all my family is Cuban and then on top of that, I'm white.
CEPEDA: Now, I don't know if you've noticed this, but they reintroduced the term "negro" to the black category.
UNIDENTIFIED MALE: Wow.
CEPEDA: When you hear that word --
UNIDENTIFIED MALE: Like negro or negro?
CEPEDA: negro, it's in the black --
UNIDENTIFIED MALE: negro in English?
UNIDENTIFIED FEMALE: negro is on there?
UNIDENTIFIED MALE: Exactly.
UNIDENTIFIED FEMALE: Right there.
CEPEDA: negro's on there, right here.
UNIDENTIFIED FEMALE: Why would negro be there? It should be African-American.
CEPEDA: When you hear the word negro, what do you --
UNIDENTIFIED FEMALE: Slave.
UNIDENTIFIED MALE: It's all politically correct. So that's what you got to think about. You know, they're trying to include everybody from negro to black or whatever whatever.
UNIDENTIFIED MALE: So you think that -- so you would choose negro before African-American?
UNIDENTIFIED MALE: No, I wouldn't chose negro, no. Of course not.
UNIDENTIFIED FEMALE: You would chose African-American, right?
UNIDENTIFIED MALE: Exactly. But then, you know, we were called negroes before we were called black and then it jumped into black. Exactly.
CEPEDA: The easiest category here is white. Why is this so easy? Because white people also have very ethnic --
UNIDENTIFIED FEMALE: I agree.
UNIDENTIFIED FEMALE: I always wonder why we're grouped together as white. Although, I wouldn't necessarily know what I am. Where do I belong? I've got Indian in there, too. But one drop Indian doesn't make me Indian. I'm still classified as white.
CEPEDA: So do you think that's fair? Do you think that these racial categories represent the true composition of America today?
UNIDENTIFIED FEMALE: No.
UNIDENTIFIED FEMALE: No.
CEPEDA: Do you think that these categories represent the true composition of what America is today?
UNIDENTIFIED FEMALE: I think there are so many people who have so many different races in them, that no. Because you're just saying, what are you? Vietnamese? All Vietnamese? Or part Vietnamese? You know, it's like putting you in a box.
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