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Wall Street Reform; President Obama on Economy, Reform; Burning the Gulf Oil

Aired April 28, 2010 - 14:00   ET

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

ALI VELSHI, CNN ANCHOR: Here's what I've got "On the Rundown."

Moments from now we'll hear from President Obama on the next leg of his Midwest tour. He's walking down Main Street, but he's got Washington and Wall Street on his mind.

Plus, the U.S. is on shaky ground these days, especially California. I mean that quite literally. Chad will show you what is at fault.

Also, you've heard of the A train and the B train. How about the moo train? The stuff they throw out of the slaughterhouse might actually end up taking you to work.

President Obama's about to speak in Macon, Missouri. Wall Street reform is the issue that he's talking about. He is -- that's the room that he's going to be in. He's going to be talking about Wall Street reform. He's going to be talking about the economy. He's going to be at an ethanol plant.

Let's talk a little bit about Wall Street reform.

Jessica Yellin is joining me for this, and Gloria Borger -- are both having a conversation that we started yesterday.

This reform bill, Jessica, has failed again. The Democrats keep putting it forward in the Senate. It continues to fail. This is three in a row.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Yes. This is three in a row. And we expect, Ali, that it will continue to fail maybe until the end of this week, when we're hearing that Republicans are likely to get on board and finally say enough with this and have a real floor debate next week.

VELSHI: Now, let's talk about this, Gloria. This is kind of weird, that the Democrats --

GLORIA BORGER, CNN SR. POLITICAL ANALYST: Yes.

VELSHI: -- keep putting this bill forward. The Republicans keep voting against it. They know they've got the votes to continue to defeat it. This becomes one of these puzzlements for most people.

What's going on? BORGER: It's a little bit of a kabuki dance. And I was talking to a source at the White House -- Jess and I were talking about this earlier -- who said, you know, it's kind of the opposite of what we saw with health care reform.

In health care reform, the Republicans were saying get this out in the open, put it out there in public. Rather, now, they'd rather cut their deals in private.

YELLIN: The Republicans would.

BORGER: The Republicans would. Have Senator Shelby cut their deals in private on things about the Consumer Protection Agency, derivatives and those kind of issues.

(CROSSTALK)

VELSHI: So, you're telling me -- you're right, they're doing a kabuki dance. They're out there voting every day, but, in fact, you are telling me people are actually talking and trying to get something done.

BORGER: They are trying to get something done. In fact, Ali, they've been talking for months in trying to get something done.

You know, the question is whether it gets done tomorrow or this gets pushed off to next week. You know, right now, the Democrats in the Senate are having a lot of fun with this, because they can talk it on the floor to death and talk about how Republicans don't want to get a bill.

YELLIN: Ali, one of the big things to keep in mind is Democrats have had success in the past by forcing votes on very popular issues that Republicans object to.

BORGER: Right.

YELLIN: And then going on the campaign trail and saying, look for this. Like, four times, Republicans voted against Wall Street reform, they'll say. Four times. And so this is not ideal for Republicans politically. And beyond that, we're going to see, likely, a floor debate break out next week where Democrats, they're sort of -- they're saying bring it on right now, because they think they have the public on their side.

Can you imagine a fight over consumer protections? Who's going to win that?

VELSHI: Yes, but this is interesting, because there are nuances here that people are bringing in. Yesterday, I was with you both. We were talking -- we were listening to the testimony from Goldman Sachs' executives. And late in the evening he testified, he was talking to the Senate, and he was saying that he felt that he supports this financial reform.

BORGER: Right. VELSHI: Because he thinks it will be good for Wall Street, which now you've got Senator Mitch McConnell using that as a reason to vote against -- or not support reform.

Listen to what Mitch McConnell had to say about Lloyd Blankfein of Goldman Sachs and reform.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MINORITY LEADER: The supporters of this bill may have locked up the support of the folks at Goldman Sachs. Goldman Sachs is behind this bill, but Republicans aren't about to push this bill just because Lloyd Blankfein is happy, and not before there's an ironclad protection against any taxpayer funding of Wall Street firms like his. Americans want to know that this bill will protect them, too.

(END VIDEO CLIP)

VELSHI: Yes. I'm not sure that we should have taken from Lloyd Blankfein saying that the bill's good for Wall Street to mean it's going to be bad for everybody in America. But, boy, there are things in there, Gloria and Jessica, that you wouldn't have guessed would be contentious.

BORGER: Well, first of all, let me just talk a little bit about what Senator McConnell is doing on the floor.

Essentially, they found the bogeyman. The bogeyman is Goldman Sachs, the new bogeyman. The other bogeyman was bailout, right? And said that this bill was all about bailouts.

Now it's Goldman Sachs. So Goldman Sachs comes to the Hill and says, we actually support financial reform, then ipso facto, it must be a bad thing, right? And Mitch McConnell can then go on the floor and say, uh-oh, Goldman Sachs wrote this bill.

Well, Goldman Sachs didn't write this bill. And it seems to me that he's just, you know, searching for anything to justify --

VELSHI: Yes.

BORGER: -- the delay.

VELSHI: Yes, it's getting a little weird.

Jessica, you were saying, ultimately, there's some way in which the Democrats are going to get the bill that they want. Or are they going to have to change it to accommodate the Republicans?

YELLIN: They don't think they have to change that much, Ali. They really think that, politically, it's such a winner because they're going to focus especially on this Consumer Protection Agency, which polls so well with the general public. People feel so abused, as you know, by mortgage companies, by their credit card companies, so that's a big winning message for them. And they also think -- saying, effectively, we want to bring a lot of these practices out into the open that got us into the meltdown in the first place is going to be a win. So, they're willing to negotiate a little, not much.

VELSHI: All right. Jessica and Gloria, thanks very much.

Let's listen to what the president has to say about this. He's in Macon, Missouri. Let's listen in.

(JOINED IN PROGRESS)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's wonderful to be this close to my house. I want to thank Poet for their great hospitality today. I want to make a few acknowledgements. We've got some special guests.

First of all, your outstanding governor of the great state of Missouri, Jay Nixon.

(APPLAUSE)

The mayor of Macon, Doug Bagler.

(APPLAUSE)

And one of my favorite people who I believe is going to be doing outstanding things, has already done great work as secretary of state, and I think is going to be an outstanding, eventually, United States senator as well, Robin Carnahan.

(APPLAUSE)

Your attorney general, Chris Koster, is here.

(APPLAUSE)

The Missouri director of agriculture, Dr. Jon Hagler, is here.

(APPLAUSE)

The CEO of Poet, Jeff Broin, is here. There's Jeff.

(APPLAUSE)

The president of Poet Macon, John Eggleston.

(APPLAUSE)

And the general manager who gave me an outstanding tour, Steve Burnett.

(APPLAUSE)

Where did Steve go? There he is, back there.

Also in the house is the secretary of agriculture for the United States of America, former governor of Iowa, Tom Vilsack.

(APPLAUSE)

Well, thank you so much for the warm welcome. It is good to be in Missouri. It is good to be with all of you here at Poet.

Steve just gave Secretary Vilsack and myself a tour of this outstanding facility. And I know Steve is very proud of the anniversary that's going to be coming up.

Ten years ago next month, this plant produced its first gallon of ethanol. And Steve was there, and others were there, and that's something to be very proud of.

(APPLAUSE)

Today you've got 45 employees who are producing 46 million gallons a year, so that means one of you is overachieving.

Congratulations to all of you.

I came here today and I visited Iowa yesterday because there's a lot of the towns here in the heartland, here in middle America, that can teach the rest of the country. There's certainly a lot that you can share with Washington, including some common sense.

So, I wanted to talk with you about your community, what you're going through, what you're experiencing. Not only the economic pain, which I think a lot of us have heard about and experienced, but also the economic opportunity, the economic possibilities.

You know, lately, we've seen some welcomed news around the country. After two hard years, our economy is growing again. Our markets are climbing again. And our businesses are beginning to create jobs again.

But when you come out to Macon and surrounding areas, whether it's in Iowa or Illinois, or Missouri or Kansas, or other parts of the heartland, you understand that the recovery hasn't reached everybody yet. Times are tough out here. In some places, times have been tough for a very long time.

In the two years that I spent running for president, and visiting towns like Macon, a lot of folks talked about how the American dream seemed like it was starting to slip away. It was getting harder and harder to reach. Families were having a tougher time getting ahead, farmers were having a tough time getting by. Worse yet, many young people had been convinced that the only way that they could make a go of it was if they moved someplace else.

But success stories like Poet, what you've achieved here, prove that that doesn't have to be the case. And I believe that your company and companies like yours can replicate this success all across the country.

Since I took office, we had to take a series of steps to rescue our economy from the immediate crisis. We were going through the worst crisis since the Great Depression, and we had to make sure that we didn't slip into a second Great Depression.

And some of those decisions we made weren't popular, but they were the right ones. And now the economy is stabilizing.

Here's the thing, though. I didn't run for president just to get back to where we were. I ran for president so that we could move forward and finally start dealing with some of the problems that we've had for a very long time. I want our economy to be on a new foundation for long-term growth and prosperity, and to create the kinds of conditions so that folks can work hard to finally get ahead.

That means making our schools more competitive and our colleges and our community colleges more affordable to young people. That means health insurance reform that gives families and businesses more choice and more competition and better protection from some of the worst abuses of the insurance industry.

It means commonsense reforms that prevent the irresponsibility of a few people on Wall Street wreaking havoc all across Main Street, all across America. And it means igniting a new clean energy economy that generates good jobs right here in the United States and starts freeing ourselves from dependence on foreign oil.

(APPLAUSE)

Now, for decades, we've talked about doing this. For decades, we've talked about how that dependence on oil from other countries threatens our economy. But usually our will to act kind of rises or falls depending on the price of gas at the pump.

We talked about how it threatens future generations, even as we witnessed some funny things going on in terms of our climate, and recognizing the environmental costs of relying on fossil fuels. But, frankly, we always said we'll get to it tomorrow. We talked about how it threatened our security, but we've grown actually more dependent on foreign oil every single year since Richard Nixon started talking about this danger of dependency on foreign oil.

And as we talked about it, other nations were acting. China, Spain, countries that recognize that the country that leads the clean energy economy will be the country that leads the 21st century economy. And they've made serious investments to win that race and the jobs that come with it.

Well, I've said before, I don't accept second place for the United States of America. I want us to be first in wind power, first in solar power, and I want to us be first when it comes to biodiesel and the technologies that are being developed in places like Poet. And that's why my energy security plan has been one of the top priorities of my administration since the day I took office.

We began early last year by making the largest investment in clean energy in our nation's history. It's an investment that we expect will create or save up to 700,000 jobs across America by the end of 2012. Jobs manufacturing next-generation batteries for next- generation vehicles; jobs upgrading a smarter, stronger power grid; jobs doubling the capacity to generate renewable energy from sources like sun and wind and biofuels just like you do here.

And that investment was part of the Recovery Act. It included $800 million in funding for ethanol fueling infrastructure, biorefinery construction, advanced biofuels research to help us reach the goal that I've set, which is to more than triple America's biofuels production in the next 12 years. That is a goal that we can achieve, and it's being worked on right here at Poet. And we're very proud of that.

(APPLAUSE)

I've also created a biofuels working group led by Secretary Vilsack, our energy sector, Steven Chu, and our EPA administrator, Lisa Jackson. And they're working to promote this generation of biofuels and help you deliver on the next generation of biofuels. And I was talking to your CEO about the incredible progress that's already being made around cellulosic ethanol and how, potentially, we can have facilities that are producing cellulosic right here, right next to the existing plant, and create overall energy efficiencies that we just have not seen before, and effectively compete with biofuels from any place in the world using brand-new technologies, in part that are being developed right here.

So, I may be the president these days, but I want to remind everybody, I was the senator from Illinois. I didn't just discover the merits of biofuels like ethanol when I first hopped on the campaign bus.

I was telling Steve, this was not the first ethanol plant I visited. And I believe in the potential of what you're doing right here to contribute to our clean energy future, but also to our rural economies.

By the way, so does our military. Some of you may have seen just last week, the Navy tested a fighter jet which was named the Green Hornet. It is the first plane ever to fly faster than the speed of sound while running on a mix of half biofuel. I actually saw the plane myself when I visited Andrews Air Force Base, and I have to say, it's pretty cool. So, there shouldn't be any doubt that renewable, homegrown fuels are a key part of our strategy for a clean energy future, a future of new industries, new jobs in towns like Macon, and new independence.

Here at Poet, I believe that you're doing more than just helping stake America's claim on our future. You're staking Macon's claim on America's future.

And I'm committed to making sure that communities like this one have a bright future of opportunity going forward. And I pledge to work with you and the great folks at the state level, like Governor Nixon, our secretary of agriculture. All of us are going to be collaborating, day in, day out, to make sure that you're successful and that we continue to build on the outstanding work. Ten years from now, I want us to look back and say that the first 10 years were nothing, that the next 10 years were even better. All right?

Thank you very much, everybody. God bless you. Thank you.

(APPLAUSE)

VELSHI: All right. The president in Macon, Missouri, talking about the economy, talking about alternative fuel.

What we think he's got on his mind, however, is a conversation about financial reform, which is an initiative he's trying to get through the Senate right now. It passed the House of Representatives in December, but the third vote -- it's sort of a test vote -- went through again today and failed.

And Jessica Yellin and Gloria Borger are dealing with this. They've been talking to me about this.

Jessica, what we were talking about a few moments ago is that even though these votes keep happening, and it allow for political fodder to say I voted in favor of this, or against it three or four times, there's some backroom negotiations. Now it seems those backroom negotiations are stalled.

YELLIN: You know, there is some disagreement on this. The bottom line, Ali, is -- we were just talking about this -- the bottom line is it looks like a deal is not going to be cut behind the scenes. It looks like we will all see some debate happen on the Senate floor next week, and maybe they'll come to agreement in the middle.

The big hold-ups are over this consumer agency, the stuff we've been talking about, derivatives, and some other stuff on the sides. But it's really about the questions of transparency and how will regular folk be protected. And Democrats really feel like they have the popular opinion on their side.

VELSHI: Gloria, what should -- go ahead.

BORGER: I was just going to say, you know, this is kind of the opposite from health care, where the Democrats did not feel like they had the wind at their back. You have polls now showing that two- thirds of the American people really want to get something done on financial reform.

I spoke with someone at the White House today who said, "Look, eventually this is going to wend its way to the Senate floor." It will get to the Senate floor, and if Republicans have objections, they'll raise them there.

YELLIN: It could take a few weeks. The whole process could take a few weeks, Ali, and then you have to deal with the House version which is very different.

VELSHI: You've got to reconcile it. YELLIN: You know, it's not pretty. But the folks I talked to at the White House and at Treasury, and in general at the administration, think this will get done. They will get a bill, it's just going to take some time.

VELSHI: All right. We'll be on top of it.

Thank you so much, Gloria and Jessica. Good to see you both again.

BORGER: You too.

VELSHI: All right. If you can't beat it, burn it. Authorities are setting that huge oil slick off the Gulf Coast on fire bit by bit, not the whole thing at once. We're going to take you there live and explain to you how it works.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REAR ADM. MARY LANDRY, U.S. COAST GUARD: If we don't secure the well, yes, this could be one of the most significant oil spills in U.S. history.

(END VIDEO CLIP)

VELSHI: Oil spilling into the Gulf of Mexico at a rate of 1,000 barrels a day. That's 42,000 gallons a day.

The current oil slick from last week's rig explosion is about 600 miles around. It's floating about -- the closest point to the Gulf of Mexico -- the closest point to the coast of Louisiana, about 23 miles off.

Right now, crews are launching their plans to burn the oil off the water. Now, they had to make a hard decision about burning it or leaving to it evaporate, and a lot of people are asking, which is worse for the environment, burning oil, or that oil slick, that if it hits coastal lands, can severely damage wildlife and the delicate ecosystem along the Gulf shorelines?

Now, according to the National Oceanic and Atmospheric Administration -- you'll know them as NOAA -- birds and mammals can handle a temporary smoke plume better than they can handle an oil slick. Now, when it comes to pollution from the burn, NOAA says there's got to be a tradeoff.

We're looking at pictures. This isn't from this spill, obviously. This is from 1989. It's what happens to animals when oil gets to them.

Burning the oil creates air pollution. Not burning the oil could allow that oil slick to spread.

Let's talk about how you burn oil when it's on water. Four conditions have to be met. The oil layer has got to be at least two millimeters thick. If there's not enough oil there, it won't catch fire.

Secondly, whatever you are using to ignite the oil has to be hot enough and it's got to last long enough to keep that fire going.

Third, the water-to-oil ratio has got to be no more than 50 percent and no less than 20 percent. And, of course, the weather has got to cooperate. The winds have to be just right. If it's too windy, you can't burn the oil.

When those conditions are met, the oil is collected with a series of towing boats and booms. You can see that sort of thing there.

The booms scoop the oil together. They move it away from the main oil slick. They do this in sections, and then they light fire to a section of it.

If that all doesn't work, BP is working on a dome-shaped pollution containment chamber that will be used in an attempt to contain the oil leak, and that chamber will be the largest-ever built.

All right, daring to dream big. A mountain biker puts the pedal to the metal to turn his dream into a viable business.

We'll tell you how he did it after this break.

(COMMERCIAL BREAK)

VELSHI: Our "Building up America" series has profiled small business owners across the country who are succeeding despite the tough economic times.

Today, CNN's Deb Feyerick takes us to Cleveland to show us the degree of difficulty for one man who is turning his dream into a reality.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT: Hard to believe, but not long ago this indoor mountain bike park was a rundown, abandoned warehouse.

UNIDENTIFIED MALE: My heart really thought it would work, and I was prepared to lose it all.

FEYERICK: Ray Peitros spent his entire life savings and maxed out his credit cards to build a dream.

UNIDENTIFIED MALE: I've been broke before. I might be broke again.

FEYERICK: Then, just as the recession hit, Ray met Jennifer Thomas, another Cleveland native determined to raise her kids here. Thomas runs Civic Innovation Lab, helping first-time entrepreneurs turn big ideas into viable small businesses.

JENNIFER THOMAS, CIVIC INNOVATION LAB: We saw Ray's as adventure sports as an economic driver.

FEYERICK (on camera): When you talk about an economic driver, what do you mean?

THOMAS: We're looking for a place like Ray's to fill hotel beds, to fill restaurants, to get people from out of state into our state.

FEYERICK (voice-over): The Innovation Lab gave Ray a $30,000 grant which he used, among other things, to add heaters and computerize his business.

RAY PIETRO, RAY'S MOUNTAIN BIKE PARK: Some routers and we got some other computers.

FEYERICK: Perhaps more valuable, they hooked Ray up with a mentor.

BERNIE MORENO, BUSINESSMAN: He had that burning passion.

FEYERICK: Bernie Moreno helped Ray get the grant and helped him avoid the mistakes he made at turning a fledgling Cleveland Mercedes- Benz dealership into a $100-million business.

Ray's is now the largest indoor mountain bike park in the nation.

(on camera): And it's not just riders; advertisers, too. Virtually everything here is sponsored. It's a small investment with a really big payoff. And what you see here at a warehouse in Cleveland goes viral on YouTube.

MORENO: I think Cleveland's in this process of reinventing itself as really a place for entrepreneurs. If you can take a thousand Rays, we can be one of the greatest cities in the country.

FEYERICK: This bike park was Ray's dream. Now he's making dreams for riders and rider wannabes come true.

All right, my fantasy, but for everyone else here, it's their reality.

Deborah Feyerick, CNN, Cleveland, Ohio.

(END VIDEOTAPE)

VELSHI: Let me bring you up to speed with some of the top stories we're following here at CNN.

Just minutes ago, the Federal Reserve pledged to hold interest rates at a record low for "an extended period of time." The Fed says the job market is starting to improve. It notes that consumer spending has picked up, but it says interest rates have got to be kept low to sustain any kind of recovery.

In North Carolina, an all-out attempt to fend off a future tragedy. You'll recall the shooting rampage at Fort Hood, Texas. That was last fall.

Well, today, Marines at Camp Lejeune are simulating a similar shooting so they can better coordinate a response. They do a mass casualty exercise every year, but added a shooter element this time to prepare soldiers for potential attacks.

And the former first lady, Laura Bush and President George W. Bush once poisoned during their tenure? In the former first lady's new memoir, she says the couple delegation got mysteriously ill on a 2007 visit to Germany. The president was even bedridden. She suggests poison maybe the cause although nothing was proven.

All right. Talk about a sad sight, spring flowers covered in snow. Isn't it almost May already? Why is it snowing? Why is it snowing in some parts of the country?

Chad is going to tell us about it when we come back.

(COMMERCIAL BREAK)

VELSHI: I guess for once I got to stop complaining about this. For once there's unseasonable weather in this country and it hasn't hit me. I was in D.C. yesterday where it was beautiful, and I flew back to Atlanta today where it's beautiful. And I wasn't here on the weekend when there was -- there were sort of tornadoes in the southeast.

CHAD MYERS, AMS METEOROLOGIST: There were.

VELSHI: But there's snow in the country right now.

MYERS: And a lot of it. Look at Nashville, Vermont, look at that number. How about 20 inches of snow? And it's almost May Day.

VELSHI: Wow.

MYERS: It's really amazing. And it's still snowing in many areas of the Northeast. Still snowing across parts of Upstate New York as well, and now snowing in the intermountain west -- all part of basically the same system that's been spinning around here for the last couple days and will continue to spin as well.

Here are some pictures from the snow -- talking about April snow showers covering May flowers.

VELSHI: I'm not sure I've seen that. That's incredible.

MYERS: Yes. Well, you know, I could tell those are tulips, but I'm not sure what some of those other ones were.

VELSHI: Yes.

MYERS: Usually, it will cover up the paper whites and things like that because they pop first, but even this year, more of the other flowers, real flowers, popped up, not just only bulbs.

One more thing I want to talk about, Ali, is that oil slick in the Gulf of Mexico.

VELSHI: Yes.

MYERS: Now, 315 miles around, if you follow that trail all the way around, and then you look at the inside of that, 2,138 square miles, plus or minus, because it gets bigger and smaller, depending on which way the wind is blowing.

VELSHI: Wow!

MYERS: That is bigger than the size of Delaware. Think about trying to put a big boom with boats around the size -- around Delaware. It just can't happen. It's too big now. So, as they're kind -- they're almost lassoing off little pieces of the slick oil --

VELSHI: Yes, yes, yes.

MYERS: -- bringing it away from the main oil slick and then lighting it on fire, as they're going to try to do today. They're lassoing it to get it thick enough, like you said, it's going to be couple millimeters thick. They have to lasso it and make smaller and smaller to kind of make that layer more concentrated.

VELSHI: I saw -- I saw you standing there when I was showing the viewers my glasses. These are not exact proportions, but the fact is, the oil on the water's got to look more like this, you've got to have more of it even though this is less -- this is more than two millimeters. But the idea is you got to have enough of it in order to catch it on fire so you can burn it.

MYERS: Reynolds did a fantastic job last hour talking about the rainbow shine. If you say a rainbow sheen, it looks bad but it's less than one paper thick. One paper thick, that's it.

VELSHI: Yes.

MYERS: You can't light that on fire.

VELSHI: Yes.

MYERS: There's too much water there and not enough oil to light on fire. You need to get it all corralled together and so that you can get it lit and then keep it lit at that point in time.

VELSHI: We're all learning a lot more about oil than we --

MYERS: Hey, let's go "OTR."

VELSHI: Let's go "off the radar."

MYERS: All right -- here we go.

What do you think about California?

VELSHI: I think they have earthquakes there.

MYERS: They have five -- they have 50 more earthquake surface faults than they thought they did 20 years ago. I know -- a confusing map behind me. Go to USGS.gov if you live in California, see if you're under one of those new faults. Now, it's not like it's new that we haven't known about it or there haven't been earthquakes, but finally now on a map.

Here's southern California, the big San Andreas Fault, the big red line there.

VELSHI: Yes.

MYERS: Slide a little bit further up to the north, and you'll see more red lines. The red lines or the black lines in the map that you look at will indicate the potential for either 7.5 or an 8.0 quake. There aren't many 8.0 areas, but certainly 7.5s all the way up even into northern California.

This is just a map to know if you're going to build a house that, you know what, let's not build it there, let's build it there because there's a new fault that we didn't know about 20 years ago.

VELSHI: Who -- how did they find the new ones? What are they -- what's the process for this?

MYERS: They've looked for the shaking. They see the shaking.

VELSHI: Yes.

MYERS: I mean, even the Mexicali quake a couple weeks ago, three weeks ago, 7.2, there have been more 4.0 earthquakes and aftershocks than in any year at this point in time. So, this might be a record year for California earthquakes because it's part of the Mexicali new earthquake, and then you have all the other aftershock earthquakes. So, it's going to be a busy year one way or the other.

VELSHI: Are we -- are we on a fault line here?

MYERS: Why?

(CROSSTALK)

VELSHI: I just got know the neighborhood.

(LAUGHTER)

VELSHI: All right, Chad, good to talk to you, my friend.

MYERS: Take care, buddy.

VELSHI: Good to see to you again. Chad Myers at the severe weather center, covering severe weather, oil, and earthquakes.

All right. I was at -- you know, yesterday, I was in D.C. listening to the testimony by Goldman Sachs' executives at the Senate. This was long -- much longer, than I expected it to be, and there were some hot moments that you may not have gotten to see because they happened late in the evening. I'll bring you those on the other side of this break.

(COMMERCIAL BREAK)

VELSHI: All right. If you think it was tough for Senate investigators to get to the bottom of mortgage-backed securities, getting an apology out of the firm now accused of fraud was even harder.

All day yesterday, I brought you live coverage from Capitol Hill. Goldman Sachs' current and former executives -- you see them lined up there, an investigation by a panel of senators pretty much united in their outrage, quite bipartisan actually, probably mildest adjective I heard from any senator all day was unseemly.

At issue, of course, is Goldman's marketing of investments based on shaky mortgage investments that Goldman itself may have been betting against. For Subcommittee Chairman Carl Levin from Michigan, the problem was Goldman not disclosing its apparent conflict of interest.

I want you to listen to this exchange. It happened yesterday evening between Goldman CEO Lloyd Blankfein. Pay attention to the frustration in Senator Levin's voice and that grimace on Blankfein's face.

(BEGIN VIDEO CLIP)

LLOYD BLANKFEIN, CEO, GOLDMAN SACHS: As a market maker, we are buying from sellers and selling to buyers.

SEN. CARL LEVIN (D), MICHIGAN: But I'm saying you're not selling it to anyone else. You are selling to somebody and you are taking the opposite position. You are betting. You are going out and getting a default swap. However it's done, you are betting against the very security that you are selling to that person.

You don't see any problem? You don't see that you have to disclose when you put together a deal and you go looking for people to buy those securities, that it just adds insult to injury when your people think it's a pile of junk, that that adds insult to injury. But the underlying injury is that you have determined that you are going to keep the opposite position from the security that you're selling to someone. You just don't see any obligation to disclose that? That I think seems to be coming through.

BLANKFEIN: I don't believe there's a disclosure obligation. But as a market maker, I'm not sure how a market would work if you -- if it was premised on the assumption that the other side of the market cared what your opinion was about the position they were taking.

(END VIDEO CLIP)

VELSHI: All right. Later in the evening, Democratic Senator Claire McCaskill switched from using the casino analogy she'd used earlier in the day to football. Listen to this --

(BEGIN VIDEO CLIP)

SEN. CLAIRE MCCASKILL (D), MISSOURI: I think most Americans think it would be really wrong for one of the football players to be able to be in the room with the bookie trying to influence what the line was going to be, and then they turn around and bet on the game they're playing in.

BLANKFEIN: Well --

MCCASKILL: That's what this feels like.

BLANKFEIN: Senator, I --

MCCASKILL: It feels like that you guys are betting on the game you're playing in and that maybe it's not a level playing field.

BLANKFEIN: Senator, on these transactions, I know there -- and I feel it -- I know there is an inherent distaste for the short side of things as opposed to the long side of things. But for every transaction, there's a buyer and a seller, and there's nothing immoral about somebody structuring a position. And, by the way, some of the people are going -- taking the short position may just be wanting to restructure their portfolios as well.

(END VIDEO CLIP)

VELSHI: It goes without saying that Goldman vows to fight that fraud allegation from the Securities and Exchange Commission which, by the way, is entirely separate from that Senate probably that played out yesterday.

Finally, I can't help but pointing out while the Dow Jones Industrial index was tanking yesterday for unrelated reason, stuff going in Greece and Portugal, it was down more than 200 points, shares in Goldman Sachs were actually up and they're up again today.

All right. Let me check in on some top stories here that we're following.

Adding a new weapon to stop that massive oil spill from reaching the Gulf Coast, the U.S. Coast Guard is attempting to set fire a part of the slick. It's a bid to keep it away from sensitive fishing and animal areas in the Mississippi River delta.

More trouble for embattled Toyota. The company is recalling about 50,000 Toyota Sequoia SUVs because of a problem with the vehicle's stability control system. There are reports that it can cause the vehicles to hesitate and slow down at low speeds. All of the recalled vehicles were made in the year 2003.

In Washington, the Supreme Court has ruled that a federal court went too far in ordering the removal of a cross in California's Mojave Desert erected as a war memorial. In a five-to-four ruling, the high court said the cross didn't violate the constitutional separation of church and state, noting part of the land was transferred into private hands.

Take a look. Is he there? There he is, Ed Henry.

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: Come on, of course. What are you doing in Atlanta? You should stay here.

VELSHI: I know. We were having a good time in D.C.

HENRY: Come over to the Hill, come over to the White House.

VELSHI: He's there. We'll be back in a minute to talk to him.

(COMMERCIAL BREAK)

(MUSIC)

VELSHI: All right, there he is.

Ed, a nice time yesterday. I enjoyed those cufflinks you gave me. I was in Washington. I was in Capitol Hill. Ed shows up to help me out with some of the stuff we're doing. I was coverage that hearing for Goldman Sachs. He's telling me what's going on and he gave me beautiful cufflinks and some toilet paper and soaps just in case my lodgings didn't provide it.

HENRY: I heard your hotel wasn't that good. I don't want to say too much on the air.

VELSHI: Yes.

HENRY: But in addition to that, Roland Martin e-mailed us and he thought the cufflinks were cheap. And they were inexpensive, I wouldn't call them cheap. But I thought they've looked pretty good. U.S. Senate on them. But I think Roland has higher standards than both of us.

VELSHI: You know, Senator Saxby Chambliss from Georgia who I spoke to agreed that maybe you need to kick up the --

HENRY: Oh, you know, senators probably have better cufflinks that the they can give out. So, the next time, you should ask Senator Chambliss.

VELSHI: He could give us some cufflink.

What do you got? What's going on?

HENRY: Well, you know, it's interesting. The president, you just had him speaking a little while ago in Missouri. He's going to be giving more remarks shortly, about 5:00 Eastern. And this is where he's going to focus less on energy, more on Wall Street reform.

A little bit of -- a little nugget from White House aides is that the president is going to take after the Republicans, but not too hard. And the reason is, this White House believes, they've got the Republicans right where they want them on Wall Street reform. They think we're starting to see that sort of wall of opposition crack.

You saw that Senator George Voinovich, a retiring Republican, who maybe is not under some of the same political pressures from the Republican leadership because he's walking away pretty soon. He indicated he's going to vote eventually to invoke cloture, basically end a filibuster.

And so, inside the White House, they now believe as early as Friday or Monday, this bill in its entirety is going to be on the Senate floor being debated upon and they think, pretty shortly thereafter, the president's going to get a pretty big win on this.

VELSHI: All right. Ed, listen, we were talking about -- we're talking about financial reform yesterday and we were obviously focused on Goldman Sachs a lot. And then you actually ended up rubbing elbows with some of the people central to this whole thing.

HENRY: Sort of, you know. I saw Robert Rubin, the former treasury secretary, former Goldman boss, this morning. I was getting the morning cup of tea over at the Starbucks, the Treasury Department behind me there, and I ran into the former treasury secretary, orders his own latte and while he's ordering, he's got a BlackBerry to his ear, talking on the phone.

But I thought, hey, this is guy in pinstripes, ordering his own coffee, that's kind of cool, maybe, you know, now, he's a man of the people. But then he walked outside and waiting for him was a chauffeured Cadillac Escalade to bring him from Starbucks to his next meeting.

And it reminded me of when you were there, hour after hour, with Christine Romans yesterday, listening to the latest boss at Goldman, Lloyd Blankfein, and other executives, why there are some people in the country perhaps who feel that the Goldmans of the world, the executives, are not exactly in touch with the common man perhaps.

VELSHI: I got to say, that suit on you would look good coming out of a nice Cadillac Escalade.

HENRY: I -- you know, and I'm not just saying it because I'm jealous. I would like to have a Cadillac Escalade.

VELSHI: They are sweet.

HENRY: I would like to have a driver but I don't.

VELSHI: Right. Get one or the other. I'm not even sure you can have one or the other.

HENRY: But you never know who you're going to run in to the Starbucks.

(CROSSTALK)

VELSHI: I got a nice -- you know, I got a little car. If you're even around the same place, I'll pick you up. I'll be a driver. You could sit in the back.

HENRY: You got a Nissan, right?

VELSHI: Yes, a Nissan. Not an Escalade. But I like it, it does the job for me. HENRY: You look good in pinstripes as well.

VELSHI: Stop. Go on. Ed, good to see you, my friend. Always a pleasure. At this time of day, we'll check in with you again tomorrow on "The Ed Henry Segment."

That's Ed Henry, our senior White House correspondent.

All right. Chugging across the country, some of Amtrak's trains are going greener. We're going to tell you why folks are mowing over the fuel test.

(COMMERCIAL BREAK)

VELSHI: This hour, President Obama was talking about his green energy goals and a big theme was biofuels. Corn ethanol is probably the one most Americans are familiar with, and maybe you've heard of biodiesel made from recycled frying oil.

Well, Amtrak is testing a newer type of biodiesel made from cows. I know, it sounds awful, doesn't it? But we're not talking about the happy cows from California. We're talking about fat, trimmed, and leftover at the slaughterhouse. It's rendered into tallow and converted into fuel and that cow-based biodiesel is helping run Amtrak's heartland flyer route for the next year or so.

The railroad wants to see how its diesel engines react so they will be doing regular -- pardon me -- regular inspections and emissions testing. Animal rights folks, including the Humane Society and PETA aren't thrilled. Surely, the cows aren't thrilled about it either.

Amtrak says the biofuel mix will mean 20 percent less diesel burned and about 20 percent less pollution.

Well, it's a powerful form of democracy in action and history is full of examples of it, and you can exercise it no matter where you live. I've got something for you in my "XYZ" -- coming up.

(COMMERCIAL BREAK)

VELSHI: Time now for "The XYZ of It."

As I told you at the beginning of the show, the city of San Francisco is calling to economically boycott the state of Arizona in a strong protest of Arizona's tough new immigration law. But whatever side you take on the issue, boycotts like these are an interesting and often effective approach. Few things have enacted social change quite like taking away goods or services that people want or need. It all but chokes the other party into changing.

Boycotts, strikes, embargoes -- whatever you want to call them -- you can actually call it democracy in action even when there isn't democracy. History is full of examples. The Boston tea party, the boycotts on British goods that brought about a revolution in the new country, the Montgomery bus boycotts which thrust forward the civil rights movement and empowered minorities across America, or the writers' strike that put a halt to lot of your favorite TV shows.

The world is a different place because of each of them. Not always better, not always worse, but different. And we hear a lot about the change.

So, if you're mad about something in a certain community but you don't vote there, you don't live there, you could consider a boycott to kind of be like your vote.

I'm Ali Velshi, that's my "XYZ."

Time now for "RICK'S LIST."