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Greek Debt Downgraded: Why It Matters?; Setting the Oil on Fire; Grilling Goldman Sachs

Aired April 28, 2010 - 09:00   ET

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

KYRA PHILLIPS, CNN ANCHOR, "CNN NEWSROOM": Thanks so much.

Goldman Sachs, if it weren't a household name before, it's got to be one now. We found out what the guy at the top thinks about his firm's new notoriety.

(BEGIN VIDEO CLIP)

CHRISTINE ROMANS, CNN CORRESPONDENT: Do you think that there's a political attack against Goldman Sachs?

LLOYD BLANKFEIN, CEO, GOLDMAN SACHS CHAIRMAN: No. I think at most I can say there is a disproportionate focus on Goldman Sachs.

(END OF VIDEO CLIP)

PHILLIPS: The CEO out of the hot seat talking one-on-one with CNN.

Arizona's new immigration law has set off a controversy as big as the Grand Canyon. Protests, travel bans and warnings. Law officers who say they won't enforce it. So who's praising Arizona anyway?

And a warning. If you love spending hours waiting on the tarmac in the stuffy plane next to that smelly guy, well, we've got some really bad news for you.

We begin a Wall Street giant accused of greed, a panel of outraged lawmakers accused of grandstanding. It was a Washington prize fight and here's your ringside seat.

Executives of Goldman Sachs spent 11 hours on the hot seat trading punches with senators that accused them of, quote, "unbridled greed." Most offensive to the lawmakers, Goldman's practice of steering investors into the housing market, then betting the firm's money against that market.

Goldman Sachs made billions of dollars in the housing meltdown but Wall Street's largest firm denies any wrongdoing. Its CEO says investors came looking for risks and, quote, "that's what they got."

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN (D), OVERSIGHT COMMITTEE CHAIRMAN: Is there not a conflict when you sell something to somebody and then are determined to bet against that same security? BLANKFEIN: In the context of market making, that is not a conflict.

LEVIN: You have the responsibility to tell that client of your adverse interest. That's my question.

DANIEL SPARKS, FMR. GOLDMAN SACHS EXECUTIVE: Mr. Chairman, just trying to understand --

LEVIN: No. I think you understand it. I don't think you want to answer it.

SEN. CLAIRE MCCASKILL (D), MISSOURI: You had less oversight than a pit boss in Las Vegas.

SEN. JOHN MCCAIN (R), ARIZONA: There's no doubt their behavior was unethical.

SPARKS: Regret to me means something that you feel like you did wrong. And I don't have that.

(END OF VIDEO CLIP)

PHILLIPS: As you can see, there was a lot of fire there. But was there much illumination?

Christine Romans is part of the CNN money team. She was actually able to talk to the firm's CEO just outside those hearings.

So, Christine, it was a pretty intense 10 hours or so, but did we really learn anything?

ROMANS: Well, we learned that this company has had to pull the curtain back, really, Kyra, and try to show America what it does and defend itself. Goldman Sachs said it wasn't betting against its client. Goldman Sachs says it wasn't betting against the economy, but Goldman Sachs still emerges here as an enemy to the recovery.

That's the perception. And I asked this Harvard-educated, multimillionaire Wall Street titan who, by the way, Kyra, at one point grew up in the projects -- I asked him, how did this happen? How did he become the face of all of this and what would he have done differently?

(BEGIN VIDEOTAPE)

ROMANS: Can I ask you how you became the poster boy for main street versus Wall Street? You're a guy who grew up with working-class parents, working-class family, your dad was a postal worker, and now you're the guy who's the face of the enemy of main street. How did that happen?

BLANKFEIN: I know in some quarters maybe that's a fair characterization, but I hope it's not like that broadly. And if -- and I hope it doesn't stay that way. I don't know that -- how it's happened. ROMANS: I mean but there are people with signs that say America's -- you know, public enemy number one, Lloyd Blankfein. I mean you -- that must pain you.

BLANKFEIN: Well, if I had seen that, it would have -- it would pain me. It pains me to hear you say it. We have -- I have, the firm has its work cut out for it. However we got to this place, we are going to work at very, very hard to make ourselves appreciated for the value we contribute and for the way in which our activities are good for America.

I know there is credibility gap there, but I tell you the activities that we do -- financing companies, helping to manage people's money -- these are all good for the United States.

ROMANS: But what about trading? And what about CDOs?

BLANKFEIN: Trading?

ROMANS: Are those good or was that nothing? Was that air?

BLANKFEIN: No, of course it's good. People can only be able to raise capital if the people who buy those equities and buy those bonds are able to sell them. And they can only sell them if there are liquid markets.

They're all connected to the capital markets. Nobody, even the legislators, they're not questioning the importance of a capital market and the work we do when we're doing well.

Their criticism is that we haven't done a good job or we haven't -- we haven't taken account of all the interest in the way we should have. And we're committed to re-earning that trust.

(END VIDEOTAPE)

ROMANS: I'm not sure, Kyra, if they re-earned that trust yesterday, quite frankly. Senator Carl Levin -- this is more than 10 1/2 hours of bruising testimony. The last 40 minutes perhaps with Senator Carl Levin with elaborate and detailed closing arguments, essentially, against this company and what this company stands for.

So this is not over yet. There's still an SEC case to go through. You've got Lloyd Blankfein and the company trying to say that it's going to close the credibility gap, it's going to try to repair its image, but after a very long day yesterday this is still a company that has a lot to prove.

PHILLIPS: And we'll be following that proof, wherever that is, Christine, for quite some time. That's for sure. Appreciate it. Great interview.

ROMANS: Thank you.

PHILLIPS: Well, the sound, the fury, the outrage. Yesterday's hearing was great political theater, but what is the substance of the Wall Street reforms now being debated on Capitol Hill? Is this just feel-good legislation or meaningful changes that could affect all of us?

CNN's John Roberts is in New York. Earlier, he had a chance to speak to the Democratic leading the bipartisan negotiation and a lot of people are wondering, John -- you know, if reform is really going to lead to true transparency or is this just smoke and mirrors?

JOHN ROBERTS, CNN ANCHOR: Well, it kind of depends on who you talk to. If you talk to Senator Chris Dodd, who is the chairman of the committee writing the legislation, he says, yes, this gives us all the transparency we need, it also ends too big to fail, but then there are other people -- Robert Reich, former labor secretary, among them, Eliot Spitzer, the former sheriff of Wall Street -- who say no, this doesn't end too big to fail, there's still a big problem there.

And in terms of transparency, Vermont Senator Bernie Sanders says no, we need more. We need it specifically in the area of the Federal Reserve.

But you also have to look, Kyra, at how we got to where we are. From the 1930s into the late 1990s there was an act in place -- the depression-era legislation in place -- called the Glass-Steagall Act which was preventing all of the things that have happened in the last decade from happening.

Well, a lot of senators, many of them Democrat, including Senator Carl Levin, who headed up the investigations yesterday, and Senator Dodd, repealed that law saying at the time, hey, we've got the best advice that we possibly could have and we thought it was a great idea at the time.

In hindsight, it was a mistake which prompted this question for me to ask Senator Dodd this morning.

(BEGIN VIDEO CLIP)

SEN. CHRIS DODD (D), BANKING, HOUSING AND URBAN AFFAIRS CHAIRMAN: You learn from your lessons going back. At that time, as you recall, that was -- those votes were adopted almost unanimously by the Congress, Republicans and Democrats voted for that.

Here we believe we've learned -- hopefully learned and again by setting up the systems I'm describing here -- consumer protection -- seeing to it you have an early warning system, seeing to it that you're going to have transparency on these exotic instruments so they have to go through the clarity of people knowing what's actually being bought and sold.

We think you can minimize those problems. Hopefully we'll get the bill done. I think it's a strong bill. It's been recognized as such. Others have amendments that will add to this. And we'll at least put up a major reform effort when it comes to the financial sector of our country.

(END OF VIDEO CLIP) ROBERTS: And just to clarify that the question I asked him was, Senator Dodd, if it was a mistake back at the end of the '90s to repeal the Glass-Steagall Act, how do we know that you're doing the right thing this time around? How do we know that you're not making another mistake -- Kyra.

PHILLIPS: I apologize for that. I guess we had the wrong sound bite there but you clarified.

All right, reality check. You know when the cameras are not rolling, these financial institutions are big campaign donors, John, and we're coming up on a big election year. So, you know, as our Carol Costello would like to say, "just saying."

(LAUGHTER)

ROBERTS: All right, so just saying, so you're wondering, you know, sort of -- with one hand the lawmakers castigate Goldman Sachs for doing what it's doing but with the other hand they take a lot of money from Goldman Sachs - $900,000 since the beginning of 2009.

You'll remember during the election campaign in 2008 then Senator Barack Obama took $994,000 in contributions from Goldman Sachs. $6 million total what they spent for the 2008 election.

And if you go back to 1990, Kyra, that's where we get a really big number. Since 1990, Goldman Sachs, the company and its employee, have donated $31 million to political campaigns since 2009, 69 percent of that money going to Democrats.

The biggest monetary contributions, though, have been reserved for Republicans. So they're not only making a lot of money, they're throwing a lot of it around on Capitol Hill, as well.

So you say to yourself, well, how can we be sure that these lawmakers are going to be independent and they're not going to just, you know, feed the hand that gives them all of this money with this legislation?

They say, hey, watch what we do with this legislation. So, I mean, there's a little bit of faith we've got to have in the lawmakers here that they're going to do the right thing because certainly --

PHILLIPS: Well, we'll be watching.

ROBERTS: -- Goldman Sachs is handing out a lot of Benjamins.

PHILLIPS: They are, and we'll be keeping an eye on all of it. That's for sure.

John Roberts, thanks so much.

Anti-government anger is boiling over just outside Bangkok, more signs that a revolution could be close at hand.

Row upon row of riot police blocked streets and used both real and rubber bullets to keep thousands of protesters from entering the capital city. They demonstrators called Red Shirts -- well, for what they wear -- trying to unseat the prime minister. They say that he runs an undemocratic government which he denies.

Police say one of their own died from friendly fire. Eight protests -- protesters rather were also hurt.

The feds describes him as squeaky clean but a former U.S. Air Force airman and Iraq war vet is accused of claiming that he had explosives on a Delta flight from Paris to Atlanta. That plane was diverted to Bangor, Maine, and WNBA star Charde Houston was one of those passengers.

(BEGIN VIDEO CLIP)

CHARDE HOUSTON, PASSENGER ON DIVERTED FLIGHT: Nervous? Yes, of course, especially when, you know, the pilot comes on and tells you that the plane has to divert. So that's definitely something to wonder about.

But ultimately, I thought they handled it very, very good. They didn't make everybody rattled. You know, they could have, but they didn't.

UNIDENTIFIED FEMALE: The stewardesses and the attendants did a great job. I'm glad to be down on the ground.

(END OF VIDEO CLIP)

PHILLIPS: No explosives were found on that plane. A federal law enforcement source tells us the suspect, Derek Stansberry, claimed to have been affected by a sleeping pill. Stansberry goes to court tomorrow. Those passengers who had to stay overnight in Bangor resume their flight next hour.

So who do you believe? Prosecutors say that nine members of a Michigan militia need to stay in jail because they're a danger to the community and a flight risk. But defense attorneys say they should be released on bond before their trial.

The judge must make a decision and she's scheduled a hearing for this afternoon. Relatives of some of the defendants may testify on their behalf.

The group is accused of conspiring to overthrow government.

Unmanned drone attacks. They've succeeded at killing militants without risking the lives of American pilots. It's easy to see why the Pentagon likes them. But are these unmanned flights legal?

That's the question today on Capitol Hill as members of a House subcommittee take a closer look. The issue is timely. President Obama used the unmanned aircraft more times last year than President Bush did in his entire time in office. And this year it's on track to be even busier for drone attacks.

The Gulf of Mexico on fire? It could happen later this morning. The Coast Guard's going to drop a match on that oil slick hoping to burn off before it oozes into the shore.

ROB MARCIANO, CNN METEOROLOGIST: Complicated current, changing winds there, also big winds out west and snow across the northeast, not just a couple of inches. In some places almost a couple of feet.

Weather is next.

(COMMERCIAL BREAK)

PHILLIPS: A massive oil slick in the Gulf of Mexico now moving closer to the coast. Only about 20 miles away so the Coast Guard has a plan -- fire.

CNN's Reynolds Wolf live in Venice, Louisiana this morning right there on the tip out in the gulf.

Hey, Reynolds.

REYNOLDS WOLF, CNN METEOROLOGIST: Hey, Kyra. You know, the whole idea about doing this sounds like it'd be pretty simple, doesn't it? I mean just to clean it up by just throwing a match out there.

Well, let's be careful here. I mean, this could be potentially a very dangerous situation. They're handling it in a very careful way. The way they go through this method is they use something that is called a fire boom, which is almost like an aquatic fence.

And they're going to take this about 1,000 feet of it from the state of Texas. They're going to borrow -- they're going to use this to -- in this endeavor. And what they'll do is they'll take off just the crude, not the sheen, the rainbow sheen which will actually dissipate on its own.

But they're going to take some of that crude and what they're going to do is they're going to pull it off, and then just do a controlled burn. But it's something they have to do very, very carefully.

Now just yesterday, I was with CNN photojournalist Steve Zorginn, and we flew out of New Orleans with the Coast Guard and from high above, let me tell you, from all the oil we could see, it's going to be a very tall order to take care of this mess.

(BEGIN VIDEOTAPE)

WOLF (voice-over): From the air, the spill appears massive.

UNIDENTIFIED MALE: The schemers and booms trying to recover oil.

WOLF (on camera): Even from this height, there's plenty to see. At the surface, there's a little bit of a rainbow-like sheen. And much of that is going to be burned away by the sun's rays, but there's also a thicker layer of crude oil in place. You know, all that is going to have to be scooped away.

(Voice-over): NOAA scientist Ed Levine says the oil moves with sea currents and winds, both affecting the slick's shape and size. ED LEVINE, NOAA: Probably about 97 percent of the floating oil on the surface is very thin sheen. Sheen's molecules are thin, thinner than a coat of paint on the side of your house. The area where the thick oil is in about that 3 percent of the surface.

WOLF: Currently the slick continues to grow and scientists estimate the well is leaking some 42,000 gallons of oil a day. Failure to contain could be catastrophic to the people, beaches, and businesses along the Gulf Coast.

LEVINE: The thing we're trying to minimize is land impacts because of the environmental and socioeconomic damage that it can do. One of NOAA's concerns is also guaranteeing the safety and the security of the seafood, that no tainted products get to market.

UNIDENTIFIED MALE: The previous location of the deep-water horizon is at 11:00.

WOLF: And it's going to take a huge effort. As we fly over the location where the deep-water horizon was once operational, all that remains is a blanket of oil and boats.

UNIDENTIFIED MALE: A number of assets on scene each day increase.

WOLF: Working to stop the leak and what Coast Guard officials say might become one of the most significant oil spills in U.S. history.

(END VIDEOTAPE)

WOLF: What's interesting about this, Kyra, also is that not -- although not everyone can see it, there are many people that along the Gulf Coast, especially in parts of Florida and then at Alabama, even Mississippi. There have been reports that people actually can smell, believe it or not, this oil slick that just continues to expand.

I mean, this thing is still -- this is still coming out, just really just hemorrhaging from the earth. And it's doing so at a very rapid rate. And this is going to continue to grow. Already we've seen the numbers of the size of the slick go from, say, 30 by 40 miles, has expanded again this morning.

It's going to continue to expand through quite some time. They're doing everything they can to stem the flow, and some of the estimates from the Coast Guard say that it may take up to 90 days before they get a good handle on managing this tremendous mess.

Back to you.

PHILLIPS: But, Reynolds, when you look at it, though, it's still -- you can't even compare it to the Exxon Valdez spill, right?

WOLF: Oh, absolutely. That's a great point. I mean, you know, we hear this -- it sounds bad, and it is very, very serious. There's no question about it. But in comparison with the Exxon Valdez back in 1989, this is again much smaller for the time being. But again we have to share with our audience that it continues to grow. The Exxon Valdez, though, if you were able to take that oil spill and you're to pick it up and just drape it over parts of the United States, it would stretch from Maine southward and cover even parts of Virginia.

So, again, it's a much bigger territory back then than compared to this one. But this is still one they're watching very carefully, trying to prevent this from being something similar to what we saw decades ago.

PHILLIPS: All right. And we're watching it, too. Reynolds, thanks so much.

Rob Marciano, let me bring you in here. Where is the oil slick moving right now? Because I know you're watching it along with Reynolds.

MARCIANO: It's kind of drifted a little bit further away from shore, but that's because of the winds have been so strong offshore the past couple of days. And that is expected to shift.

The deal with the ocean currents, with the gulf currents, it's pretty complicated in this very spot. It's almost like the intersection between two very different currents, the loop current, and Florida current that kind of goes around Florida which gives Florida some clear water and then the close current near the Louisiana shoreline kind of goes -- definitely goes from east to west.

So it's right at that spot. If it moves a little bit further to the west, gets picked up by this current, if it moves further south and east and will get picked up by this current. Over the next couple days our winds are going to switch and we'll see more of a south and southeasterly wind.

That would tend to it bring a little bit closer to the Louisiana shoreline. But it's still very -- it's still days before that would become an issue and hopefully by then they'll have at least the bulk of that crude oil cleaned up in one way, shape, or form.

(WEATHER REPORT)

PHILLIPS: Yes, we'll track it. Thanks, Rob.

MARCIANO: You bet.

PHILLIPS: He admits he's an assassin. Now the killer of a civil rights icon walks free among us.

(COMMERCIAL BREAK)

PHILLIPS: President Obama is on the road today to see Wall Street reforms. He says every American will benefit from safeguards that could prevent another near collapse of the financial system.

He's also criticizing Republicans for blocking its debate in the Senate. President Obama makes his pitch in Illinois and Missouri today.

Passengers on a diverted Delta flight finally get to resume their trip next hour. The Paris to Atlanta flight was diverted to Bangor, Maine yesterday after a security threat.

Derek Stansberry, a former U.S. Air Force intelligence specialist has been detained. He is accused of claiming to have explosives on board. No explosives were found. A federal law enforcement source says Stansberry blamed a sleeping pill for his behavior.

The immigration debate takes center stage for you on Capitol Hill. In less than 10 minutes, Republican leaders are expected at the podium to talk about Arizona's controversial new immigration law. We'll have much more on this throughout the morning.

Remember Kent State? Chicago's police commissioner conjuring up uncomfortable images as he fights the call for National Guard troops on city streets. It's all about a climbing murder rate.

(COMMERCIAL BREAK)

PHILLIPS: Battling the violence in Chicago where 113 murders already this year. Earlier this week a couple of local lawmakers said they wanted the National Guard called in.

Police and the governor are not biting, but on the front lines, in the hospitals, they are demanding action.

(BEGIN VIDEO CLIP)

DR. STEVE SALZMAN, ADVOCATE CHRIST MEDICAL CENTER: Ultimately, I think that's the million-dollar question and that's what everybody in Chicago -- lawmakers, the police, medical staff -- everybody is struggling with that.

I think, yes, we need more presence perhaps on the street. One of the things is that I think we need to be very proactive and out of the box with the way we deal with violence.

And for instance, one of the programs that we're doing now is cease- fire, a violence prevention program which is basically where we have ex-gang members and people that are very ensconced still in the community and have community ties to come into the hospital basically as part of the trauma team, tend to prevent recidivism and retaliation, and act as violence interrupters to diffuse the situation.

And again, that's not the only answer but certainly it's programs with out-of -the-box thinking like that that clearly is the start because the conventional, conservative way of doing things, it's not working.

(END OF VIDEO CLIP)

PHILLIPS: Chicago's police superintendent says he's preparing a special squad of officers to battle the rise in violent crime. Other plans are in the works, too, but sometimes it's just not enough. Next hour, we're going to hear about how one victim dying on the street told cops to take a hike.

The only person ever to admit his role in the assassination of Malcolm X is a free man today. Thomas Hagan was released on parole from a Manhattan prison.

Malcolm X was gunned down on February 21st, 1965 as he delivered a speech at the Audubon (ph) Ballroom in Harlem. He was one of the most polarizing yet compelling figures of the civil rights era.

Hagan, who's 69, has repeatedly expressed sorrow for his part in Malcolm X's murder.

Stocks around the world selling off. The Dow plunged more than 200 points yesterday and overnight markets in Asia tumbled. All of this because of what's going on in Greece.

Stephanie Elam in the New York -- in the New York bureau? Yes. The New York bureau with all the details.

So, Stephanie, yesterday Greece's debt rating was cut to what's called junk status. Let's go ahead and you know, for those that are not investment savvy here, what exactly that means.

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Yes, it's worth a little bit of a discussion, I think, Kyra, because it kinds of -- it cloudies for a lot of people what is going on. And it sends the message when you get this junk status that Greece may have trouble paying off its debt and it really has a lot of it right now.

Virtually every country issues bonds, and a bond is essentially an IOU. But let's say you buy a Greek bond. You're giving the government cash and the government is giving you a note that says when it will pay you back and how much.

Generally bonds from the government, they're investment grade which means they're seen as very safe. But then there's another type of bond that's called a junk bond, and the name really does say it all.

Junk bonds are high risk and there's a chance you may not get your money back. No one wants to hear that. So that makes it harder and more expensive for that country to get loans and because of yesterday's downgrade, that's where Greece stands on this one -- Kyra.

PHILLIPS: Got it. All right. So, bottom line, how does this all affect the U.S.?

ELAM: Right. Greece is really far away from us, but really, the truth is there are fears this could spread and the world is so much smaller now. So, remember the subprime mortgage crisis? It started here but then it affected so many countries around the globe. In Greece, they're going to get a $50 billion bailout from the EU and IMF to help pay off the debt. That would be similar to you paying off a credit card with another credit card. So, you still have that debt there. But Greece is not the only country that's in this situation. Portugal, it actually had its -- it was downgraded yesterday but still considered investment grade, not junk status.

Italy, Ireland, and Spain also being watched because of this. And if other European countries default on their loan, the EU and IMF may not have pockets deep enough to bail everyone out, so the result could be another credit crisis and that's why we care. So, the good news is we're not seeing another sell-off like we saw yesterday. We're not losing 200 points. In fact, the Dow is up 45 points, 11,036, Nasdaq better right now by half percent at 2484. So, that's class for today, Kyra.

PHILLIPS: Thank you, teacher.

ELAM: Yes, sure.

PHILLIPS: Some moment (ph) with more of the lesson.

(COMMERCIAL BREAK)

The immigration debate about to start on Capitol Hill. Republicans talking just moments ago about a new Arizona immigration law. Democrats are scheduled to take their turn in about 90 minutes coming out against that law. We're monitoring it for you.

Unmanned drone attacks have succeeded at killing militants without risking the lives of American pilots. It's easy to see why the Pentagon likes them, but are these unmanned flights legal? That's the question today on Capitol Hill as members of the House subcommittee take a closer look. The issue is timely. President Obama used the unmanned aircraft more times last year than President Bush did in his entire time in office.

The coast guard considering a drastic step to derail that massive oil slick in the Gulf of Mexico. They want to set it on fire and burn off some of the oil before it hits the coast. The slick is about 20 miles away from Louisiana now. There's a small navy out there trying to mop it up. Fifty boats and that don't include the eight submarines working to stop the underwater oil leak.

A northwest storm is moving eastward now, blowing more snow into the Rockies?

ROB MARCIANO, AMS METEOROLOGIST: Yes, more snow, but winds really the big thing with this storm that's moving in and out west. Winds over 120 miles an hour in some of the higher elevations of the Sierra Nevada where they're also getting snow. We're also getting snow across parts of the mountains in the northeast. Some state in New York and places in Vermont seeing anywhere from 10 to 20 inches of snow already on the ground with more snow on the way today, although it's starting to wind down, and kind of see the echoes starting to get a little lighter and this is slowly moving off to the east.

This is still apparent storm of what brought all the severe weather to the plains over the weekend. It just does not want to get out in the Atlantic. It's been a slow mover from the beginning, and it continues to act in this way and now bring in the cold Canadian air mixing in that wet snow all the way down in spots to the Massachusetts border and trying to get into the Berkshires. As I mentioned, we saw winter storm warnings that are posted, 10 to 20 inches total expected. In some spots we've already seen that. So, good forecast and an unusual weather event certainly this late in the spring where the flowers and trees have already bloomed and blossomed across that part of the world.

All right. Salt Lake back through San Fran, all the way up to Seattle, all these cities and these states are enduring this storm, which is very powerful for this time of year, and as mentioned, right through I-70 and over Donner pass there down in through Reno, we had damaging winds yesterday. Now, we're seeing some snow beginning to pile up. The Great Basin, the Four Corners, getting into the Front Range today. This is where high wind warnings are posted as this storm gets into the plains and really starts to tap into some of that southerly wind and those winds become a little less encumbered as they get into the very flat plains, not only today but tomorrow.

Also adding to the ingredients tomorrow, we're going to see the potential for severe weather as it begins to tap moisture from the Gulf of Mexico. Fire danger remains high because of the high winds and the dry conditions there. Speaking of dry conditions, we finally get into some across parts of Northern New England tomorrow. A gorgeous day expected both today and tomorrow across the mid-Atlantic and the southeast with high pressure in control and the pollen count actually is getting a little bit more bearable for folks across the south.

We'll call it dropping from high to moderate in places that have been seeing unusual amounts of pollen for the past couple of weeks. The higher amounts will be seen across the northern tier where their trees now are beginning to pollinate as the sun gets higher in the sky closer to the Canadian border. All right. Spring is here, but you wouldn't think it across parts of the northeast.

PHILLIPS: I know.

MARCIANO: That's for sure.

PHILLIPS: Exactly. I know. Wondering. We're just talking about this morning with security rolling in, it was so cold today. It felt like winter.

MARCIANO: Yes, I thought so.

PHILLIPS: All right, Rob. Thanks.

Do you ever wonder, hey, why does Facebook need to know that about me anyway? Apparently, some lawmakers have seen the questions Facebook is asking and they're saying TMI.

Mutiny on the bounty today in history. Captain Blye was sent packing on this date in 1789. The descendants, Mutiny on the Bounty crew still live at Pitcairn Island. That's right near Tahiti, by the way. Cark Gable, Marlon Brando, Mel Gibson, they all played lead. Don't near (ph) Fletcher Christian in that movie. In 1967, Muhammad Ali refused to fight. His heavyweight title was stripped when he refused induction in the army. The quote, "I ain't got no quarrel with those Viet cong." Well, he got a five-year prison sentence but didn't serve a day.

And in 1990, when singular sensation ended, "A Chorus Line" closed to run on Broadway. They did more than 6,000 performances during the 15- year run.

(COMMERCIAL BREAK)

A Wall Street giant accused of greed, a panel of outraged lawmakers accused of grandstanding. It was a Washington prize fight, and here's your ringside seat. Executives of Goldman Sachs spent 11 hours on the hot seat trading punches with senators that accuse them of, quote, "unbridled greed". Most offensive to the lawmakers, Goldman's practice of steering investors into the housing market, then betting the firm's money against that market.

Goldman Sachs made billions of dollars in that housing meltdown, but Wall Street's largest firm denies any wrongdoing. Its CEO says investors came looking for the risk and, quote, "that's what they got."

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN, (D) OVERSIGHT COMMITTEE CHAIRMAN: Is there not a conflict when you sell something to somebody and then are determined to bet against that same security?

LLOYD BLANKFEIN, CEO, GOLDMAN SACHS CHAIRMAN: In the context of market making, that is not a conflict.

LEVIN: You have the responsibility to tell that client of your adverse interest. That's my question.

DANIEL SPARKS, FMR. GOLDMAN SACHS EXECUTIVES: Mr. Chairman, I'm just trying to understand --

LEVIN: No, I think you understand it. I don't think you want to answer it.

SEN. CLAIRE MCCASKILL, (D) MISSOURI: You had less oversight than a pit boss in Las Vegas.

UNIDENTIFIED MALE: There's no doubt their behavior was unethical.

SPARKS: Regret to me means something that you feel like you did wrong, and I don't have that.

(ENDVIDEO CLIP)

PHILLIPS: Gregory Zuckerman joining us once again. He's a "Wall Street Journal" reporter who authored a book on Goldman Sachs and the dealings that led to this month's fraud allegations. He joins us live from New York. So, what do you think? Did this deliver? Are you skeptical? I want to know your overall thoughts, Greg.

GREGORY ZUCKERMAN, SPECIAL WRITER, WALL STREET JOURNAL: Well, I think the congressman tried to deliver a knockout punch or two and Goldman played a rope-a-dope a little bit, dodged the big punches. I mean, you could argue that it was helpful to see kind of how a real firm operates. The veneer was sort of pulled back and you can see that sometimes they'll sell products that they don't actually believe in or actually sometimes bet against. I think that was helpful in that regard.

PHILLIPS: And I asked you this question yesterday, you know, is this just the culture? Hey, we know what we're getting into when we're dealing with these guys. I mean, nothing is ever on the straight and narrow. So, you know, I mean, inside the beltway, I guess, people know that, but, I mean, you've written books about this. You knew what we were dealing with. I mean, these guys are going to convince themselves they didn't do anything wrong, right?

ZUCKERMAN: Well, on Wall Street, it's well-known that when you do a trade with somebody like Goldman Sachs, they may be agreeing with you, they may not be agreeing with you. They're selling you a product they don't necessarily believe in. A lot of sophisticated investors are aware of that. Not everyone is aware of that. And, you know, it's not so simple to kind of castigate Goldman Sachs.

They were making markets sometimes, so, if someone comes to them, you know, you want to buy a blue suit, you may not like blue suit, may not be the flavor of the year, maybe out of season, but, hey, if you want to buy a blue suit, they'll sell it to you. Similarly, they were selling products they may not believe in. That said, it looks sort of improper when you actually are betting against a product and elsewhere in the firm perhaps you're selling it.

PHILLIPS: And so now you just kind of wonder when your broker comes to you and says, ok, so how aggressive do you want to be? Do you want to be aggressive? I mean, I'm not telling you to go that way but, you know, maybe if you're in it for the long term it's not a bad idea.

In other words, is that broker saying to you, you know, I'm not telling you to do this, you're taking a big risk but hey, I'm going to use that word aggressive and kind of cover myself here?

ZUCKERMAN: Right. It's an interesting question. And, you know, a lot of what happened in the last few years on Wall Street was perfectly legal but maybe in hindsight shouldn't have been done. And to me this is one kind of example.

There were a lot of securities that were purchased, a lot of securities that were sold. And again, it was all perfectly legal. And you can argue that everything that Goldman Sachs has done was on the books and legal and yet now with the benefit of hindsight at least maybe they regret it.

I do think you have to remember that these were sophisticated investors on both sides of the equation on these trades that we're talking about and that Goldman Sachs has been grilled about.

So it's not like mom and pop and no one is being accused of kind of a widow and orphans buying this stuff. These were sophisticated banks. So there's just so much sympathy you have for people that didn't really do their own research and you can argue that those that got hurt the most were investors were sort of banks that didn't do enough research.

PHILLIPS: I know it's been interesting for you to follow especially when it's the juice of your book. Gregory Zuckerman, I appreciate your time, thanks for following along with us.

ZUCKERMAN: Sure.

PHILLIPS: I know we're talking more.

Well, Goldman Sachs, yes, more like sacks of comedy gold, easy targets for Jimmy Kimmel and Jay Leno. Here's your morning snark.

(BEGIN VIDEO CLIP)

JAY LENO, HOST OF "THE TONIGHT SHOW WITH JAY LENO": The top executive of Goldman Sachs testified before Congress today. There's proof. Crooks always return to the scene of the crime. You see?

JIMMY KIMMEL, HOST OF "JIMMY KIMMEL LIVE": The senate-held hearing is focused on what role Goldman Sachs played in the mortgage meltdown of 2008. Goldman Sachs is the world's most powerful investment bank. They were just charged with profiting from bad mortgages. They allegedly sold their own clients bad mortgages and then bet against them to make profits for themselves.

I think this might be what the judges from "American Idol" are doing to us with these crappy singers, by the way. But the senators made quite a show of grilling these guys for hours under oath, which is kind of funny because the men a lot of these senators are grilling happen to also be some of their biggest campaign contributors.

SEN. CARL LEVIN (D), MICHIGAN: Should Goldman Sachs be trying to sell -- and by the way it sold it, a lot of it, after that date -- should Goldman Sachs be trying to sell this (EXPLETIVE DELETED) deal?

UNIDENTIFIED MALE: Senators, with all due respect, if you don't watch your tone, we might have to cut off your allowance. Do I make myself clear? Oh, no more questions? All right.

KIMMEL: You've got to love this thing. It's called capitalism. If you don't like it, move to Cuba.

(END VIDEO CLIP)

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PHILLIPS: Oh, yes. Does that McDonald's commercial bring it all back for you? Come on, you remember being their age; mom and dad saying those famous words, "McDonald's tonight?" That was the big night out; the night without brussel sprouts or liver.

Well, that night they we're going to get the source of happiness. You know, the Happy Meal, cheeseburger, fries, small coke; and of course, the golden ticket, the hidden treasure, the toy. Now, the joy of the toy going, going, gone for some.

Get this -- in California the Santa Clara County Board of Supervisors has banned restaurants like McDonald's from putting toys in kids' meals. Just ripped the tail of the mermaid right off her bed of chicken McNuggets until the meals meet certain nutritional guidelines; you can see Ronald McDonald pulling his red hair out right now.

The guy who sponsored this saying it's wrong to basically use a toy as bait to lure a child to eat food that's lousy for them. Basically afraid that Kayla and Tayla (ph) the happy meal mermaids are really foul temptresses seducing children into obesity.

I don't know, I understand the county's point, but it's not like you have to bribe a child to eat a cheeseburger, McNuggets or French fries.

And you've got to think some parents are not loving it and your kid is screaming and you don't have time to cook, you'll do anything. Well, maybe the problem is parents who see Happy Meals as a lifestyle instead of an occasional treat. That's the problem. It just seems like the kids are being punished here, doesn't it?

Well, we've got a lot going on in the CNN NEWSROOM. CNN crews gathering all the details for us in a number of stories; let's check in with Lisa Desjardin in Washington -- hey Lisa.

LISA DESJARDIN, CNN CORRESPONDENT: Hey Kyra, you know there is a lot of talk about immigration, right? After this Arizona law was passed. Lots of talk, is Congress going to do anything? We'll take a look coming up right at the top of the hour -- Kyra.

JOSH LEVS, CNN CORRESPONDENT: And if Congress didn't already have enough going on, now some senators are taking on Facebook saying your privacy is at risk. What you need to do online to protect your information. I'm Josh Levs. I'll have that coming right up.

ROB MARCIANO, AMS METEOROLOGIST: And I'm Rob Marciano in the CNN Severe Weather Center. Spring snowstorm, sure, we've had them, but 20 inches? That's what's going on in northern parts of Vermont and New York, plus a powerful West Coast storm whipping up winds there. We'll talk at the top of the hour -- Kyra.

PHILLIPS: Thanks guys.

Betrayal of trust in the Boy Scouts of America, a victim comes forward and dark, terrible secrets are revealed. Why was this American icon ordered to pay millions of dollars? We're going to have the story and the man at the center of it.

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PHILLIPS: Well, Miss Independent is misunderstood in Indonesia. Kelly Clarkson recently blogged that she had no idea a tobacco company was sponsoring her show set for tomorrow night in Jakarta. The tobacco company is now out, but Clarkson is still facing opposition from Islamist groups who are calling to ban her performance. Indonesia has long enjoyed a thriving entertainment scene, but its large Muslim population is becoming more vocal.

Your senators in D.C. already have plenty on their plate, but a handful are saving room for Facebook. They're afraid it might be hazardous to your privacy. Josh Levs has torn himself away from his Facebook page which he is always updating it because I see him in the newsroom doing it.

JOSH LEVS, CNN CORRESPONDENT: Yes, I do it, too.

PHILLIPS: So, Josh, what's the complaint.

LEVS: You know what? Here's something -- I think that Facebook is like this mutant octopus. It has all these different tentacles and it reaches out across the web in so many different ways.

Even if you go on your Facebook page and you want to see your messages there's at least eight different ways to get them.

So I can talk to you forever about the various privacy questions but what I want to do now is help you all zero in on what a handful of senators are very concerned about at this point. First, I'm going to do that by showing you what it isn't, and a lot of people are confused here.

CNN.com is a great example of this. If you sign into Facebook, and a lot of people leave their Facebook pages up all the time. Automatically, if you're on Facebook, when you're on cnn.com or a bunch of other Web sites, your friends are going to pop up and your traffic is going to pop up here in this new plug-in.

This is not what's worrying the senators. What they're worried about is something more like this. This is a Web site called Yelp. Facebook has hooked up with three individual new Web sites, individual Web sites. Yelp is one of them and Microsoft stocks is another one. Pandora is another one.

When you get to the Web site, this blue bar at the top says it's automatically getting some of your information from Facebook. It's looking at your profile. It's looking at your friends, it's allowing that hookup.

This is what these senators say they're concerned about because it's automatic.

Let's take a look at what Senator Charles Schumer said yesterday.

(BEGIN VIDEO CLIP)

SEN. CHARLES SCHUMER (D), NEW YORK: We believe Facebook should reverse its policy so that users have to opt in to sharing data rather than opt out and this would ensure that the default setting for all users is that their information is kept private. With the current system, the up-front disclosure of what's happening with your personal information is confusing at best. The onus here should be on Facebook, not on the user.

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LEVS: All right. Now, quickly I'm going to give you Facebook's side of this. Let me have a graphic for that. There is a quote that Facebook put out in response to what these Senators are saying. They say that, "These partners have been given access to public information on Facebook, such as names, friend lists and interests and likes to personalize your experience when you're logged I to Facebook and visit their sites."