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Dow Plummets on Worldwide Gloom; Feds Launch Probe Into S&P; President Calls for Syrian President to Resign; Stock Market Plummets; President Leaving for Vacation; Booster Scandal Rocks College Sports; Boy Dies From Brain Eating Amoeba
Aired August 18, 2011 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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BROOKE BALDWIN, CNN ANCHOR: What a day of trading. The numbers will begin to settle, the Dow down -- you see the picture.
Guys, let's go back to the Big Board and see the picture of the numbers and the Dow.
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ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: That's 100 points better than it was at it low. I have got to tell you, I'm breathing a sigh of relief, because every other time this has happened, Brooke, when you and I have talked --
BALDWIN: It was down 634, what, last week.
VELSHI: And we seem to be getting worse at the close. It seems to be higher volume. We're at the lows of the market at the close, which is what Europe ended up largely doing. It was closed just off the lows which then makes me immediately move forward by four hours and think, uh-oh, what happens when Asian markets start?
The fact is here the buyers didn't quite win, but they put up a hell of a fight today. And you end up with some people having bought into this market. We were down more than 500 points at the low which was much earlier in the day. This is actually not nearly as bad as it looked for much of the day. It's not bad, Brooke. It's bad, but it's not as bad.
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BALDWIN: Richard Quest, we have kept you up late there in London. Final question and then we will let you -- thoughts and we will let you go.
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RICHARD QUEST, HOST, CNN INTERNATIONAL'S "QUEST MEANS BUSINESS": Some quick points, quick points on the Dow. In the last 20 minutes, there was a buying spur which petered out. Interesting to know whether that was just covering of financial transactions or whether there was some real buying coming into the market. It didn't have legs. I'm sorry to say Friday as I leave you now triple witching, high volatility. Hold on to your hats.
BALDWIN: Maybe we can have you back on if there's ever any good news.
Richard Quest, thank you so much live in London for us. Appreciate it.
Ali Velshi, stick around, why don't you? We will continue this conversation here live on CNN's special edition.
Let's go to Alison Kosik, though, at the New York Stock Exchange.
As we those numbers settle, Ali said maybe a little bit of a sigh of relief since we have seen worse numbers just, what, a week ago. Is that what they're feeling on the floor?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Exactly. Oh, yes. It definitely could have been much worse. We saw the Dow down as much as 529 points and you know what? We saw the market come back a little bit in the final few minutes of the trading day. Everybody down on the floor was thinking it will be an even bigger sell-off. So, sure, that's good news.
You want to see another bright spot? Look at oil. Oil prices down almost 7 percent at $81 a barrel. Obviously we're not thrilled how we got there to see a sell-off push oil prices lower, but there is a positive for you. If you're a consumer going to the gas station and filling up that car, we can hopefully see gas prices go even lower.
The winner of the day, Brooke, definitely gold. Gold hitting a record high of $1,826, up almost 2 percent today. Of course, that flight to safety. Everybody getting out of stocks and going on to something a little safer like gold and Treasuries -- Brooke.
BALDWIN: Alison, thank you so much. Stand by. Ali Velshi, stand by.
I want it on bring in economist Robert Reich from University of California, Berkeley, former labor secretary under U.S. President Bill Clinton.
Robert Reich, nice to have you back on the show here.
ROBERT REICH, FORMER U.S. LABOR SECRETARY: Hi, Brooke.
BALDWIN: You know what? You have been witness to this. I have been in this seat during out closing bell. I have witnessed these wild, volatile swings that we have seen in our markets.
Can you just translate this for us, what this means for Americans specifically, be they out of work, have a job, stockholders, not stockholders? What is it that we're seeing here?
REICH: Well, first of all, Brooke, don't pay too much attention to a single day on the New York Stock Exchange. There is wild volatility. The general trend is unfortunately downward. And I think that reflects the market's concerns -- and it's a rational concern -- about the possibility of drifting into a double dip. You see, there's no economic growth first half of this year and when you have 25 million Americans who are either unemployed or underemployed, there's not enough aggregate demand because consumers are 70 percent of this economy.
BALDWIN: Robert Reich, stand by.
Ali Velshi, are you listening? Because Robert Reich says we should not be paying so much close attention to what happens on one single day of trading. Do you agree?
VELSHI: Yes, I would be happy to switch jobs with him, because I know I would love to not to have to pay attention to it every day. But, unfortunately, we have to.
Robert, let me ask you this. You have published 10 points which look to me like the recipe for a plan to get people back to work. And I can't go into all the detail about them. You know them well, but exempting the first $20,000 of income, recreating the WPA to get long- term unemployed back to work, creating an infrastructure bank, letting distressed homeowners declare bankruptcy, so they can reorganize their loans, on and on.
Does this kind of big idea have any traction amongst people who are making decisions about what to do right now?
REICH: Well, right now, Ali, I think in Washington there is kind of an obsession as you pointed out on Jon Stewart's show with deficit reduction, which may be over the long term a very important thing to do.
VELSHI: Right.
REICH: But right now, it's the opposite of what we ought to do. In fact austerity in Europe and austerity in the United States are exactly the reverse of what is needed when an economy is operating as this economy is and Europe at so far below productive capacity.
BALDWIN: Well, let me jump in because I know exactly what Ali is talking about. I hopped on your blog as well early. And you have these 10 different components. Let me just ask you to be specific for people who haven't read your blog. They don't know.
If you had the president's ear, his economic council's ear, what recommendations would you make to the president so we could see jobs?
REICH: Well, number one, exempt the first $20,000 of income from payroll taxes for at least two years. That would put money directly into people's pockets and they would spend it.
Number two, have a WPA, a Civilian Conservation Corps the long- term unemployed, because we have got to get the long-term unemployed back to work, much better than sitting on their haunches and collecting unemployment insurance. And their work is critically important in terms of rebuilding America.
Number three, an infrastructure bank that is sufficiently capitalized, $300 billion to $500 billion a year, to deal with our crumbling infrastructure, roads, bridges, highways, our ports, airports, and our schools, all of which desperately need repairs.
And when we have so much unemployment, it is absurd not to have people actually doing this. And then the Treasury bill -- if I could just finish this, Brooke, the T-bill is trading so low. We're seeing rock bottom 2 percent on a 10 year T-bill. This is the time to borrow to make the kind of investments in jobs and infrastructure that we need to make.
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BALDWIN: This is the time. I know you know according to our reporting at CNN that the president will be making this major policy speech. Yes, he goes on vacation today. He will be coming back to Washington.
And specifically let me get this. This is from our reporting from our unit here. This jobs package that he plans to unveil, it's going to call for targeted tax cuts for employers, new national infrastructure investment and long-term help for the unemployed.
So, given what you have seen though and what you have heard from Republicans, and I pose this same question to Congressman Lewis last hour -- I just want your perspective here -- Republicans say they're not green-lighting any new spending. Do you think then that this legislation that the president's about to propose, doesn't it even stand a chance of passing?
REICH: Well, it probably will not get through the House. The Republicans will say no, as they have said no all long. And the president, what he needs then to do is to bring it to the people. Mobilize, energize, organize.
Say to the people, look, this is the way back to jobs. I'm going to fight for this. If the Republicans are not going to go along with it, then I'm going to make this the centerpiece of my campaign. We, as a nation, need to get to work. This is the only and most important agenda on my item and -- agenda item on my --
BALDWIN: Plate.
REICH: -- total agenda. And if the Republicans want to stick to the lie that a small government generates more job, they can do that, but I'm going to debate them on it.
BALDWIN: Robert Reich, thank you so much. Good to have you on the show. Thank you.
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BALDWIN: Ali Velshi, the man who never sleeps, who is up all day long, thank you so much for weighing in here. You are the expert. VELSHI: Can we work together some time when it's not about the market?
BALDWIN: In the same city, good news, I would definitely be into that.
VELSHI: Yes.
BALDWIN: Ali Velshi, thank you so much.
VELSHI: All right.
BALDWIN: To our international viewers, thank you for being with us. We now want to return you to Max Foster with "Connect the World." Thank you for joining us.
For our viewers in North America, straight ahead, it's been an investigation that has been going on for years. So why are we just now finding out about it? Much more on the U.S. Justice Department's probe into the country's largest credit rating agency, the same agency that just downgraded America's debt. Is this backlash? That's next.
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BALDWIN: So with all our attention on the Dow, what the Dow has done today, we don't want to lose track of another important financial story.
And that is this. The U.S. Justice Department is now investigating this country's largest credit rating agency, Standard & Poor's, S&P. That's the rating agency that recently cut this country's debt credit rating from AAA to AA-plus. That happened just about two weeks ago.
Want to bring back in Rick Newman, good enough to stick around here. He's the chief business correspondent with "U.S. News & World Report."
And, Rick, so this investigation, supposedly, it began months and months ago, long before S&P's downgrade of the U.S. credit rating. So even so, though, a lot of people seeing this investigation as payback for the downgrade, will they not?
RICK NEWMAN, CHIEF BUSINESS CORRESPONDENT, "U.S. NEWS & WORLD REPORT": Yes, obviously. The timing is very provocative.
BALDWIN: Yes.
NEWMAN: But there really are two totally different things going on here.
I mean, it's important to remember that the ratings on these mortgage-backed securities and derivatives of these mortgage-backed securities that go back to 2005, '6, '7, '8, and so on, these have been under investigation for a while, basically ever since the financial crisis. These were one of the key elements in a long daisy chain of events that contributed to the collapse of the housing market, the subprime crisis and so on. The Securities and Exchange Commission, which is a different agency, not affiliated with the Justice Department, has been supposedly looking into this problem that these ratings agencies gave these securities the highest rating, which obviously was a mistake.
They were wrong about the solidity of those securities. It's clear that they were wrong. It's not clear however that any of them committed a crime or that they should be financial or legally liable for the ratings that were wrong. So the government in a couple of different ways has been looking into this for some time.
And it's a totally legitimate question. So it does seem that this has just been leaked to "The New York Times" recently and it's not related to S&P's downgrading of the U.S. credit rating, which happened a couple of weeks ago.
BALDWIN: I just want to go back because for people who are hearing about this for the first time, just make it crystal clear to me. I know you don't work at the DOJ, but from what we're learning that the article, what specific questions is the Justice Department asking of the S&P and if in fact they find that in terms of maybe lowering some of the ratings, if it rings true, what could the Department of Justice do?
NEWMAN: The Justice Department, it is worth pointing out, has not announced that they're doing this investigation. It has just leaked out.
BALDWIN: "New York Times."
NEWMAN: Yes, that's right.
The critical question is whether Standard & Poor's and any of the other rating agencies may have sort of falsely inflated their ratings of those securities back in 2006 and so on because they were being paid by the banks who were issuing those securities. That's basically the way the rating system works. To most of us, it seems like a built-in conflict of interest, because naturally anybody who is paying for you a rating wants you to give them the highest rating you possibly can.
So I think what they're trying to figure out is, it's clear that they were wrong about those ratings. The question is, did they sort of artificially inflate the ratings because they wanted to keep the spigot open and keep getting business so that these firms would keep saying we will keep paying you because we love the fact that you're giving everything a AAA rating? I think that is what they're trying to figure out and whether that would in fact be criminal.
BALDWIN: I should also point out here CNN has confirmed this investigation as well.
But for an American just wondering, well, what does this mean for me, can you help me translate that? Why should we care?
NEWMAN: It doesn't -- I don't think it means much for ordinary Americans.
The downgrade in the U.S. credit rating does mean something. And the next thing to watch in that regard is whether the two other big rating agencies, Moody's and Fitch, will join us S&P and downgrade the U.S. rating in the future. So far, they have said, no, we're not going to do that. We actually think the U.S. deserves a AAA rating.
S&P could in the future raise it back up to AAA. I think everyone would like to see that. But that's not likely to happen any time soon, and I don't think it's likely to happen in any way that makes it looks as if S&P was pressured or yielded to pressure from the government to get that rating back up.
So it could be a while before that happens, if it does happen at all.
BALDWIN: Certainly, though, back to this department of justice investigation into the S&P, if they find that some of he's potential allegations ring true, what could happen to S&P? What could they face?
NEWMAN: They could be prosecuted in some way. There could be fines. There could be one of those settlements that you get where the firm doesn't acknowledge any wrongdoing but agrees to pay a big fine so it looks as if the government actually got something for its trouble, all of those things.
I think what a lot of people would like to see is a new way of doing these ratings so that the rating agencies are not getting paid by the very firms that they're rating. And there are some regulations in the pipeline that might do that, but it's just not clear how that will shake out yet.
BALDWIN: Rick Newman, thank you very much to explaining that, from "U.S. News and World Report." Thank you, sir. See you again.
I want to turn our attention to some other stories today, including the jihadist death threat against CBS funnyman David Letterman. We'll tell you why the FBI is now involved.
Plus this.
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UNIDENTIFIED FEMALE: I'm sad that he's gone. I miss him more and more every day.
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BALDWIN: What a sad story. A brain-eating parasite has claimed its third victim. This time this nine-year-old boy died after swimming in a Virginia river. We'll speak with his mother coming up.
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BALDWIN: And welcome back here. I'm Brooke Baldwin.
You know, if it's interesting and happening right now, you're about to see it -- "Rapid Fire."
Let's go, beginning with worry. Worry about U.S. and global economies sent Wall Street into another downward spiral. The Dow closing down 419 points today. Stocks were hit by bad news on a couple of fronts. First you had the Morgan Stanley report issuing a dismal global economic forecast, and U.S. housing and manufacturing came in worse than expected.
Also this, late might TV host David Letterman is being targeted with a death threat from a jihadist website. Letterman's being marked for death allegedly for comments he made about a dead Al Qaeda leader. Here's what he said.
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DAVID LETTERMAN, HOST, CBS'S "LATE NIGHT WITH DAVID LETTERMAN": So anyway, they picked a successor to Osama bin Laden, and his name was Elias Kashmiri. Well, guess what, he was blown up by an American drone. Yes.
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BALDWIN: The group that monitors jihadist sites says it's urging its American followers on cut off Letterman's tongue for his comments.
Prosecutors in New Hampshire announcing an award for any information in the death of an 11-year-old girl. Celina Cass was last seen in her bedroom back on the night of July 25th. One week later, divers found her body in the Connecticut River. No one has been arrested or named as a suspect. Investigators are still looking into the cause of her death. It's unclear today's reward will replace or supplement a $25,000 reward offered by the FBI before Cass's body was found.
And this amazing story of honesty in the aftermath of Japan's tsunami tragedy -- safes filled with cash found in the debris, and not just a few -- 5,700 of them containing nearly $30 million all around there. Cleanup crews turned all the money over to police who tracked down the owners. They used any means possible, going into hospitals, evacuation centers and examining change of address forms in the post office, and they found most of them.
Was it a crazy fan, was a teenaged vandal? But a sign designating it Justin Bieber way was stolen in Texas just two days after it was put up. The road was renamed after the teen singing sensation when an 11-year-old girl became mayor for a day. And her first order of business, rename a street after her singing idol. The real mayor says he's none too thrilled and ordered a replacement sign stat.
Do you remember happy feet, the wayward penguin who showed up on the shores of New Zealand this summer all alone? Well, he's expected to go home next month. Scientists say this little guy is healthy and ready to travel all the way to Antarctica. And he will have a little company for at least part of his journey. A research vessel will take him to the sub-Antarctic waters and release him into the southern ocean. And then from there researchers can monitor his movements with, of course, a GPS tracker.
BALDWIN: Two tough talking Texans battling it out today on the campaign trail. Plus, which former Obama administration official is now making a run for the Senate? CNN's Paul Steinhauser has that coming up next. He'll join me live from Washington in your Political Ticker.
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BALDWIN: Let's go to Washington now for your "CNN Equals Politics" update. CNN's Paul Steinhauser standing by as always with the freshest news off the Ticker.
Paul, let's begin with the news on Ron Paul and a former Obama staffer.
PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Yes, let's start with that. Elizabeth Warren is her name. She was in the new as lot last year, Brooke. Remember she was the economic adviser to Barack Obama who set up the consumer financial protection agency, which is a brand new agency set up last year, and an agency that was not well-loved by a lot of Republicans. They would like to see it scrapped.
Last year she set up the agency, but she wasn't named to head it. She went back to Harvard University. She's a law professor up there. And today she took the first formal steps to maybe launch a campaign and maybe take on Republican Senator up there Scott Brown. She formed an exploratory committee today. She launched a website.
There are seven other Democrats already in the race, but none of them a lot of name recognition. And national Democrats think they need somebody maybe like Warren to run against Scott Brown. Remember, Brown was pretty popular up there. He won the special election up there last year. That was a big surprise, Senator Kennedy's old seat. He has about $10 million in the bank. So stay tuned. That will be one heck of a Senate race up there in Massachusetts, Brooke.
BALDWIN: OK, I feel like one of the last times I talked to you, you were at the state fair in Iowa, right, very closely following the Republican race for the White House. What's the latest today on that?
STEINHAUSER: Remember I had a Twinkie log, fried Twinkies.
BALDWIN: Oh, boy.
STEINHAUSER: Yes, no more say the fair. Back here in D.C. for now.
All right, Ron Paul, last night he was in New Hampshire. He opened up his campaign headquarters in the first primary state in the nation. He's campaigning there today. He was talking about Rick Perry. And this is interesting because Perry has been in the news for those comments about calling Fed chief Ben Bernanke treasonous, in a way.
Ron Paul is saying, wait a minute, I've been talking about the Federal Reserve for years, saying we should scrap it, it should be audited. Let's get rid of it. So Ron Paul may be trying to grab back some of that spotlight.
And Brooke, you want more Ron Paul, stay tuned. Top of the hour, I think Wolf Blitzer has him on "THE SITUATION ROOM."
BALDWIN: We'll ask Wolf about that in a couple of minutes. Paul Steinhauser, thank you so much.
And let's talk here about the president. The president of the United States heading off for a little vacation starting today. Let's go to Dan Lothian, who is a step ahead of the president already in the lovely Martha's Vineyard. Talk about the president I guess finally getting a little bit of R&R.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. And it's not without controversy, as you know. For weeks when word got out that the president was planning on coming here the third summer now in a row, there have been those who have criticized the president, both Democrats and Republicans saying that this should not be the place where he is right now, that he should be in Washington calling lawmakers back to Washington so they can deal with some of the tough issues out there affecting the economy. And the president, as you know, working on his new jobs proposal.
But the White House pushing back on that saying, listen, this is someone who needs to get out, get a little R&R. And when the president goes on vacation, it doesn't matter where he go, even here in Martha's Vineyard, that he might be leaving the White House, but he's not leaving his job. He's always surrounded by his team of aides. He'll be getting all the briefings on national security, on foreign policy matters, as well. So he might be away from the physical structure of the White House, but the White House itself will be following him.
BALDWIN: Dan, let's go back to the double box because we were getting live pictures of the president leaving in Air Force One. There is the plane, I should say, at Andrews Air Force base, just a hop, skip and a jump away from Martha's Vineyard.
And, Dan, I know you mentioned he has a big policy speech, the president does, when he comes back into town next month, certainly his team will be working on while he is away. Also making news, though, today, the fact that the president was calling on Syria's president to step down. And one big question, though, is why did it take so long?
LOTHIAN: Right. And the administration has been asked this question now for several weeks, if not months, why the president did not call on Assad to step down much sooner. And what the White House and other administration officials have been saying is that they really want to get the allies behind them. They wanted to make sure that this was an international effort that there's no way that Assad could say will is this is simply the U.S. acting alone. So that is what they point to as trying to essentially get the international ducks in a row before coming out with a forceful statement that you heard today from Secretary Clinton.
BALDWIN: Dan Lothian, thank you. That image behind you almost looks fake, but I know it's real. Enjoy it.
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LOTHIAN: It's very real. It's beautiful here.
BALDWIN: Enjoy it.
LOTHIAN: We are working.
BALDWIN: Of course you are, very hard. Thank you, Dan.
Speaking of boats behind Dan, let's talk about yachts, jewelry, cash, even prostitutes just some of the things allege allegedly provided to University of Miami football players. New developments today in that bombshell revelation that is clearly rocking the sports world. Back in two minutes.
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BALDWIN: Wall Street plunges, the U.S. asks Syria's president to step aside, and the latest on the University of Miami's athletic scandal. Time to play Reporter Roulette. Alison Kosik, let's begin with you at the New York stock exchange. Talk to me about the Dow that we saw today taking a bit of a nose dive. Not quite as worse as we've seen not too long ago.
KOSIK: Right. Everyone wants to know what brought the bears on out today. You know what brought them out, investment bank Morgan Stanley saying that the U.S. and Europe are getting dangerously close with going into recession, with Morgan Stanley even dialing back its economic growth forecast for both the U.S. and Europe for this year and next. That certainly stoked the fears of recession here on Wall Street.
Also we have this litany of bad economic data for the U.S. Jobless claims are back up above that 400,000 mark. Home sales are down 3.5 percent. There's a regional manufacturing index that came out that showed contraction. We also found out consumer prices road. So we have all of this piling on one after another that really kept Wall Street in quite the funk today.
BALDWIN: You know what, though, I want to point to one specific issue, a part of this Morgan Stanley report that I think is just key to point out. They say the main reasons for growth downgrade are recent policy errors in the U.S. and Europe. That's interesting.
KOSIK: Yes, it is. It's the same reason why Standard & Poor's downgrade the U.S. debt because we see what's happening in Washington. And really what you see happening is maybe this is Wall Street's way of holding the street to the fire, show some action, and maybe we'll even rally once or twice.
BALDWIN: We look forward to it, Alison Kosik. Thank you so much.
Next let's go to CNN's Jill Dougherty live at the U.S. State Department. Jill, big news came after months and months of bloodshed, as you know in Syria, the administration calling for the departure of Syrian President Bashar al Assad. Let's listen, Jill, to Secretary of State Hillary Clinton.
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HILLARY RODHAM CLINTON, SECRETARY OF STATE: The people of Syria deserve a government that respects their dignity, protects their rights, and lives up to their aspirations. Assad is standing in their way. For the sake of the Syrian people, the time has come for him to step aside and leave this transition to the Syrians themselves. And that is what we will continue to work to achieve.
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BALDWIN: But here's the question, Jill. Is the administration backing up these words with deeds, with actions that might actually encourage the president to step down?
JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: They actually are, Brooke. They call them the toughest and they are the toughest sanctions so far that the U.S. has levied on Syria. And what they're going to do is freeze Syrian assets under U.S. control or jurisdiction. They're going to forbid any Americans from having any business dealings with Syria. And then finally they'll ban any imports or Syrian oil or petroleum products.
So those are strong steps and they're hoping that other, mainly the Europeans, will be following in their tracks and doing the same thing.
BALDWIN: But the major investment in Syria doesn't come from us here in the United States. It comes from Europe, from some of the Persian Gulf Arabs. Has the U.S. done the ground work to get those folks on board?
DOUGHERTY: They're trying to, and they do feel that they're going to be hearing from other countries very soon and over the next few weeks, days, months, et cetera. And you make a really interesting point because remember when you had the stand why now and why couldn't they do it before. That was really the key, because the U.S. doesn't have a lot of leverage. Very little of the business of Syria is here in the United States. We have almost no Syrian oil. It's miniscule. So that's why you couldn't really do it until you got other countries in this kind of coalition to do it.
BALDWIN: Makes sense. Jill Dougherty, thank you very much. And next on Reporter Roulette, the scandal we talked about this yesterday, this is rocking the University of Miami. We're talking about allegations of extravagant gifts and cars and cash and even prostitutes provided to some of these football players. David Mattingly is digging into some of these details for us in Coral Gables, Florida. David?
DAVID MATTINGLY, CNN NATIONAL CORRESPONDENT: Brooke, everyone here at the University of Miami completely taken aback by the shear scope of these allegations from the former booster Nevin Shapiro, who claims he had dealings breaking NCAA rules with players from a period of 2002 until 2010. Shapiro saying this involved over 70 players, a dozen of those players still on the Hurricane team.
The Hurricanes have a new coach this year, Al Golden, who says he came here to concentrate on football and to take this program back into national championship form. But now he's having to answer a lot of questions for problems that happened before he got here.
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AL GOLDEN, UNIVERSITY OF MIAMI FOOTBALL COACH: I think if anything, it's going to bring us closer together. Again, 90 percent of the guys have nothing to do with this as it happened in the past. So for the most part, inside here, we're moving forward. Nobody wants to get to the truth quicker than I do, and the way you do that is you cooperate and you get your young people to cooperate. And if they did make a mistake, let's be honest and open and let's move forward.
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MATTINGLY: University of Miami president Donna Shalala saying that she wants the truth to be pursued and to follow that truth wherever it might take them. The athletic director for the University of Miami also saying that tough times are ahead for the university.
But at this point, it's the NCAA that will have the final word on what might happen as they continue their investigation. Already they're saying if this is true then they may have to seriously look at changing the rules about how universities deal with these boosters. Brooke?
BALDWIN: What a story there in Coral Gables, Florida. David Mattingly, appreciate it. And that's your Reporter Roulette for this Thursday.
Coming up next, though, this will be a tough one. My interview with a Virginia mother who just most her nine-year-old son, the nation's third victim of this deadly brain-eating amoeba. That is coming up. Plus, what you need to know about this parasite, especially if you're a parent. We'll be right back.
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BALDWIN: "I love you." Those with were a nine-year-old's final words to his mother just before he died. His name is Christian Strickland. He lived in Virginia, one of three actually to die recently after suffering this rare infection from this waterborne amoeba.
I have never heard of this amoeba, and maybe you haven't either. What it does is it climbs up into a child's nose, a person's nose, destroys the brain when people swim in warm fresh water like lakes and rivers. Christian apparently went to fishing camp and was in the water a lot. He was perfectly normal according to his mom when he got back, but later started complaining of a headache, and it just got worse. By the next day he couldn't recognize his own mother, and he died just a couple of days late later.
Christian's mother Amber Strickland is actually on the phone with me from Virginia. Amber, my sincerest condolences to you, and I understand you wanted to come on CNN to get the world out to parents that this can happen. Let's just begin --
AMBER STRICKLAND, LOST SON TO BRAIN EATING AMOEBA (via telephone): Well, I know a lot of people watch CNN and I thought it was important to get my story out about Christian.
BALDWIN: We appreciate it. Christian was your son's name. Explain to me, so he goes to camp, he comes back. You think everything's fine. And then he takes a nap and everything changes. Describe what happened.
STRICKLAND: Well, Christian at first had been complaining that his head hurt. And he had been on a medication for ADHD with side effects were headache, so that's all I assumed it was. So I put him in the bathtub to soak his head, make it feel better, and then gave him an Aleve, and it told me it felt better.
The next morning, he wakes up, he could barely talk. It was like his jaw was wired shut. His saliva was foamy, and his tongue was swollen when he was talking. And I was worried, but not as worried as when I tried to get him to take him to the doctor. He looked at me frightened, like I was going to hurt him. I was trying to lay him down, and he just kept sitting up, sitting up and staring at my face like he was trying to figure out who I was. And that scared me to death. I got him to the doctor and they took one look at him --
BALDWIN: He took him to the ER?
STRICKLAND: I took him to the ER.
BALDWIN: Doctors gave him a spinal tap and the doctor looks at you and says --
STRICKLAND: He looked at the fluid, and the fluid was cloudy right from the get-go. But there was no bacteria in it.
BALDWIN: So then what did they tell you?
STRICKLAND: So that was the confusing part. He was showing all the symptoms of bacterial meningitis except for the bacteria in the spinal fluid. So they were confused. I mean, we had him on so many antibiotics, I wondered if it was going to kill him just for being on so much medicine. They treated him for West Nile, everything you could possibly think of, every sickness, everything, Herpes Simplex that you get from mosquitoes and all of that. They treated him for everything
BALDWIN: So they're casting a wide net, they're casting a wide net at the hospital.
STRICKLAND: And then I came back and he was screaming and then that's when the doctor explained that he had encephalitis. Meningitis is the infection of meninges, the fluid and stuff around your and encephalitis is an infection of the actual brain itself.
So his brain started to swell and when they did an MRI, they noticed that every crevice in his brain was filled with -- I can't even think of the word.
BALDWIN: That's OK. But basically --
STRICKLAND: -- pus. It was filled with pus basically.
BALDWIN: So he's in this hospital Amber, how --
STRICKLAND: He went in on Tuesday at 4:00. They took him to Pediatric ICU and by Thursday morning at like 2:00 in the morning, he was brain dead.
BALDWIN: He was brain dead.
STRICKLAND: And we tried to donate his organs. She said he was more special than we even knew because of how many, you know -- it's rare to find a B positive donor his size.
BALDWIN: But you wanted to have a legacy for your son. You can't donate his organs. I understand his final words to you were I love you?
STRICKLAND: It was crazy. He was in so much pain. They wouldn't give him any medicine or anything and out of nowhere, just so peacefully, he said, mommy, I called him buddy, and yes, buddy. He said I love you. Those were his last words that I heard come out of my baby's mouth.
And I'll never be able to touch him or hold him and he was so amazing. I still thank God even though he took him back, I still thank God every day that he brought me Christian because he changed my life in so many ways.
BALDWIN: Nine years of age. He was an adorable little boy. We're looking at pictures of him. Amber Strickland again, my thoughts and prayers to you, to your family, I thank you for coming on. Because I think a lot of parents perhaps never heard of this. Amber, thank you.
STRICKLAND: Yes, you know, and especially, too, all those projects, this is our main thing. That you better cherish your children because you don't know when tomorrow -- I mean, my son was just playing video games, had been inside for four days.
You know, there was -- I had no idea. So cherish your children because you never know when they're going to be gone. All those projects that you haven't done that you're promising that you're going on do, do them. Because those are the things that mean so much to them and those are the things that you'll regret the most.
BALDWIN: Amber Strickland, again, condolences. Thank you so much for coming on. You know, to you, if you're as moved by the story as I was and you're a parent and you're wondering if there's anything I can do, here's what we've learned. I wanted to pass this along.
Don't swim in water untreated water especially during high temperatures, try and hold your nose shut or use nose clips when you're swimming in warm fresh water and avoid digging or stirring up the sediment if you're in shallow warm fresh water spots.
And although infections we're told are very, very rare, there is no treatment for this fatal amoeba yet.
Coming up, a Jihadist website issues a death threat against late night host David Letterman. Now the FBI is joining in that investigation. We are on the case today with Casey Jordan next.
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BALDWIN: A couple of minutes away from "THE SITUATION ROOM" with Wolf Blitzer. Let's check in with Wolf. See what he has going on for the show.
Wolf, a little birdie tells me you have Ron Paul on the show today.
WOLF BLITZER, HOST, CNN'S" THE SITUATION ROOM": Ron Paul, the Republican presidential candidate, you know, he came in second in the Iowa straw poll. Some are suggesting he's not getting equal treatment with the other Republican candidates running for the Republican presidential nomination.
And I'll ask him if he thinks that the national news media has been fair to him, but we'll also get into some of the substantive issues. He differentiates as you know, Brooke, with all of the other Republican candidates including the Democratic candidate that would the president of United States when it comes to bringing the American troops home, not only from Iraq and Afghanistan, but from Germany, from South Korea, he wants all those hundreds of thousands of U.S. troops back in the United States immediately, right away. So we're going to get into that.
I'm also going to ask him if he thinks Iran does or does not represent a real threat to the United States and if it's seeking to build some sort of nuclear device. So Ron Paul, also Nikki Haley, the governor of South Carolina, she's going to be here in "The Situation Room." She's a rising star in the GOP. We'll talk to her about what's going on, as well. So got a good news coming up right at the top of the hour -- Brooke.
BALDWIN: You do, Wolf Blitzer. We'll see you in 5 minutes. Thank you so much.
Still to come here though, young girls, teenagers on Facebook, do they have a right to expose themselves online? We're on that case coming up next.
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BALDWIN: Two cases I want to dove into, first this Jihadist web site issues this death threat against late night TV host David Letterman and also high school girls playing naughty on their Facebook pages actually win a case against their principal. Casey Jordan on the case for us today.
Casey, let's begin with this Letterman story. So there are these terror groups are calling for followers to actually, you know, cut his tongue out here in the United States. Let's listen to what Letterman said that has them calling for his death. (BEGIN VIDEO CLIP)
DAVID LETTERMAN, HOST, "THE LATE SHOW WITH DAVID LETTERMAN": So anyway, they picked a successor to Osama Bin Laden and his name was Elias Kashmiri. Well, guess what, he was blown up by an American drone.
(END VIDEO CLIP)
BALDWIN: So that's it. That's what he said. Casey, I know that there are reports that the FBI now is jumping on this investigating the threat. What do they look for and what can they really do?
CASEY JORDAN, CONTRIBUTOR, "IN SESSION" ON TRUTV: Well, the most important thing to take away from this is that they're on top of the intelligence. They're monitoring the extremist web site in which this threat was made known.
And you're right. He just joked about it and granted everyone was very celebratory around that time because it was early June just after, of course, Bin Laden had been killed. And what the important thing is now the threat is coming out and we're unclear as to whether they've known about it for two months or are just making it known to the public.
I have a feeling they've been monitoring this for the full two months and Letterman has known about it, nothing has happened, but perhaps precautionary measures have been taken because I don't remember Letterman making anymore jokes about the Jihad since June.
BALDWIN: Interesting. Do you think, though that it's gotten all kinds of traction because it involves a celebrity, that there were lots of threats out there and this is just -- it's David Letterman?
JORDAN: Yes, absolutely and I think what I take away from it is that it's very reassuring to know that these sites are being monitored, but there are thousand. The poster who uses an alias who posted the threat against David Letterman had over 1,200 posts.
There's a lot of work and he's just one of thousands of people who are posting. So it was a lot of work to actually monitor these sites, many of them in different languages, to take away the threats.
But this one was serious enough that the FBI did an investigation and is monitoring the situation. I think Letterman takes it seriously, too. Again, I don't think you'll hear anymore jokes on this topic. It just isn't worth it no matter laughs you get because there are people out there who will respond to that call to action.
BALDWIN: Yes, lesson learned. Second case, this is for parents, let's talk about Facebook here. So this judge has actually decided with a group of high school girls who had been punished by their principal for these lewd, you know, inappropriate pictures they posted on Facebook. No question the pictures were say -- let's just say we're not putting them on this show, but Casey, why did the judge take the side of the girls?
JORDAN: Well, they won their free speech complaint because these photos were taken at slumber parties at a private home after school hours in fact during the summer break. They ended up getting posted on Facebook.
Now keep in mind these girls are 15 and 16 years old. They involved a phallic-shaped lollipop, but the girls were close. They weren't pornographic, they were wearing lingerie and pajamas, they simply -- it's the actions that they photographed that were extremely lewd.
But it's not really an issue of how lewd or obscene or pornographic the photos really were. The whole issue was it had nothing to do with school activities. The principal was tipped off to these Facebook photos and suspend the girls for extracurricular activities for one year not from school.
But their attitude is anything we do off of school time especially in the summer break is our business, it doesn't interfere with school at all. The judge agreed, your free speech is protected even if you're a teen, even if you're lewd as long as you're not disrupting the school, the learning process.
BALDWIN: Do you think the judge had ruled the same way has this happened on campus, 20 seconds?
JORDAN: That's a great question, yes, I have to think it would have gone a different direction. The whole issue is does it disrupt the learning process. Now what I really want to know is do kids look at Facebook during the school day, are they given access to the internet to computers?
Do they have their cell phones with them so will that they can be saying, look, Susie did this great picture with the lollipop? If the answer is yes, then they may have lost the battle.
BALDWIN: We'll do it another day. Casey Jordan, thank you so much on the case for us today.
Thank you so much for watching and now to Wolf Blitzer. "THE SITUATION ROOM" starts right now.
