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Early Start with John Berman and Zoraida Sambolin
Fallout At JPMorgan Chase; Yahoo! CEO Out; Zuckerberg Turns 28; Arizona Wildfires; Police Search For Missing FBI Agent; Reports: JPMorgan Chase CIO Out; Bodies Found Along Mexico Highway; "The First Gay President"; JPMorgan's $2 Billion Mess; Flesh-Eating Bacteria
Aired May 14, 2012 - 05:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZORAIDA SAMBOLIN, CNN ANCHOR: Did you notice anything different this morning? We got a brand new look. We're happy you're with us. Good morning to you. Welcome to EARLY START. I'm Zoraida Sambolin.
ALI VELSHI, CNN ANCHOR: And I'm Ali Velshi in for Ashleigh Banfield. It is 6:00 a.m. in the east, so let's get started.
SAMBOLIN: Yes. Up first this morning, pain at JPMorgan Chase. According to Bloomberg, the banking giant will accept the resignation of Ina Drew (ph) as early as today. She is the chief investment officer and one of the highest ranking women on Wall Street, pulling down a salary of over $15 million a year.
The entire staff of the company's London chief investment office could also be dismissed. More fallout from the investment firm's staggering $2 billion loss stemming from those risky trades. Those so-called proprietary trades are what took down AIG during the financial crisis. CEO, Jamie Dimon, doing damage control on Sunday's talk shows.
(BEGIN VIDEO CLIP)
JAMIE DIMON, CEO, JPMORGAN CHASE: This is a stupid thing that, you know, that we should never have done, but we're still going to earn a lot of money this quarter. So, it isn't like the company is jeopardized. You know, we hurt ourselves and our credibility, yes, that we got to fully expect and pay the price for that.
(END VIDEO CLIP)
SAMBOLIN: And Christine Romans is with us this morning. And burning question at least for me is why should I care?
ROMANS: Well, you should care because, look, three years after the financial crisis, the very kinds of things, credit default swaps and risky hedge -- is it hedge, is it insurance or is it a raw bet? All of a sudden, $2 billion in losses, this is what brought AIG down. Now, this is a much smaller scale. It's a totally different subject, but, it shows you things really haven't changed and all of those rules and regulations to try to rein this stuff in don't have (ph) in place yet.
You saw Goldman Sachs and JPMorgan Chase actually are trading for the benefit of their firm. So, think about this, a bank, it takes your money, it takes your deposits or a bank has an investment bank, and they help companies go public or they help companies buy other companies.
But what JPMorgan is doing its trading its own money to make money for itself and that's something in the wake of the financial crisis many people wanted reined in.
VELSHI: Who is this woman who the reports are is resigning or has resigned, Aina Drew, by all accounts many people don't know who she is and never heard her name. And yet she's got to be one of the most high-ranking women on Wall Street.
ROMANS: Fifteen million dollars a year according to the "Wall Street Journal" and other. Look, I mean, there aren't very many women like that who get all the way to the top.
And especially sort of the world of JPMorgan and Jamie Dimon, he believes in results, right? So this is clearly a woman who until now has gotten results. Would you agree, Ali?
VELSHI: Sure.
ROMANS: I mean, you don't see women get this high very often because it is -- I mean, banking is banking. It's a dog eat dog profit-driven business.
VELSHI: It's a bit of a guy world.
SAMBOLIN: You know, in "The Daily News" they call her the fall gal.
ROMANS: Well, I mean, if she ran this office and she ran this division, I mean, then it was her job to make sure that this didn't happen, a $2 billion trading loss. Jamie Dimon said there could be another $1 billion maybe.
And we know also in the hedge fund world people are kind of salivating at how they can squeeze Dimon a little bit more for some more profit on their end.
So there's a lot going on in the trading world that's pretty fascinating right now. We also know Elizabeth Warren, somebody who had the president's ear for a while about banking reforms and reforms of just these kinds of practices.
She's someone who has actually said that Jamie Dimon should not be on the board of the New York fed, but think about that. That's a regulatory body, New York Federal Reserve --
VELSHI: So guy who's on top of the company that did this sits on a body that regulates banks. I mean, you can get why people who don't follow the story as closely as we do are saying I don't understand a piece of this. I don't understand proprietary trading, credit default swaps.
SAMBOLIN: Earlier this morning, when we were chatting this morning you mentioned gambling analogy and it really kind of hit home.
VELSHI: These banks have said let us do these things, this proprietary trading because we're hedging. We're providing an insurance for ourselves for tough times.
But neither JPMorgan Chase, which basically sold that so- called insurance nor the people trading against JPMorgan Chase who were buying the so-called insurance, had anything to do with the underlying assets.
So if you owe me money, Zoraida, and I take out an insurance policy because I think you may not pay me that's one thing. But if you owe Christine money and I take insurance out on that, that's just a bet. That's got nothing to do with protecting myself.
ROMANS: He's taking out insurance you're going to pay me, but nothing happens to him if you don't pay me.
VELSHI: That's where it becomes a bet.
SAMBOLIN: That's a ding, ding, ding, moment for me where I thought, OK, I get it.
VELSHI: People have been tweeting me saying, who cares? Let them fall. A, they won't fall, but B, it's in your 401(k). If they do what AIG did, which they won't. But if it gets that serious, remember what AIG did, it crippled the entire world.
ROMANS: Look, when people say I don't care about the banks, break them up or make them smaller. Look, banking has become very, very complicated, but we don't want to root for banks to fail.
We don't want bankers to fail because that's the oxygen of the American economy. We'll have Elizabeth Warren, by the way, in the 8:00 hour. She's the one who made the controversial call to have him step off New York fed board so we'll have from her at 8:00.
SAMBOLIN: All right, thank you, Christine.
ROMANS: You're welcome.
SAMBOLIN: It is 3 minutes past the hour. JPMorgan Chase not only in a major company crisis, this morning, Yahoo's chief executive Scott Thompson is out after four months on the job.
In the "Wall Street Journal" reports before leaving Thompson told Yahoo's board of directors he was beginning treatment for thyroid cancer.
Scott Thompson resigned in a scandal over his resume claiming a computer science degree that he never earned. Yahoo media chief Ross Levinson will replace him as the company's interim CEO.
And a big day for Facebook CEO Mark Zuckerberg. You know this, maybe you don't know this, he turns 28 years old this morning and also today this is what kicks off a huge week for the young tech tycoon.
Facebook is expected to start selling stock and trading on the Nasdaq this Friday. The IPO could value the company at $100 billion, making it worth more than Disney, Ford and Kraft Foods.
VELSHI: If I were a buddy of his, I wouldn't give him a big gift because he'll have a big gift on Friday.
You're looking at fires in Arizona. Fire crews have all they can handle with four separate wildfires burning across the state. The biggest is something called the sunflower fire. It was spotted Saturday in Tanto National Forest near Payson, Arizona. By Sunday, some 2,700 acres had burned.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Terrain is extremely rugged out here, you know, lots of steep canyons, rocky, and other variable is the dry, hot conditions.
(END VIDEO CLIP)
VELSHI: Fire officials say extreme heat and dry vegetation have created a high fire risk in some parts of the state.
SAMBOLIN: The defense begins its case this morning in the corruption trial of John Edwards. Lawyers for the former senator argued for a mistrial Friday claiming prosecutors failed to prove their case. The judge denied that motion. It's not clear which witnesses will be called today, but Edwards is not expected to testify.
VELSHI: In the cover of "Newsweek" is shocking more than a few readers this morning. Take a look. It features Barack Obama with a multicolored halo over his head describing him as, quote, "the first gay president."
Last week, President Obama, you'll know, made history publicly backing same-sex marriage. This afternoon, he'll be in New York attending a lesbian, gay, bisexual, transgender event hosted by Ricky Martin, guests paying up to $35,000 apiece.
SAMBOLIN: He is a father, a husband, a former police officer and most recently an FBI agent specializing in counterterrorism. He's also now missing. Find out why everyone is so worried about him. Right after the break.
(COMMERCIAL BREAK)
VELSHI: A major manhunt is under way in Southern California, 100 FBI agents and dozens more law enforcement officers are on the hunt not for a fugitive, for a fellow agent who has been missing since last week. Alina Cho is here with more on this truly bizarre story.
ALINA CHO, CNN CORRESPONDENT: It is and would you believe that it's sparked the largest manhunt in Burbank, California, in two decades and spanning a wide area of L.A. County.
Ali, good morning. Good morning, everybody. And what is so troubling about this story is that, Special Agent Steven Ibens, the man who is missing, is said to be despondent and possibly suicidal.
Authorities won't say why they believe that is the case, but it is the big reason why those searching for him right now are so concerned. Now here's what we know at this point.
Iben's 35 years old, was last seen Thursday night, according to authorities. The very next morning on Friday police say he left his Burbank home on foot and then simply disappeared, and it is believed that he took his handgun with him.
(BEGIN VIDEO CLIP)
STEVE GOMEZ, FBI SPECIAL AGENT: There is no history of violence associated with Special Agent Ibens or any known threat to the community, as the investigation has covered no evidence of foul play. Special Agent Ibens is known to have been distraught and investigators believe he may possibly be suicidal.
(END VIDEO CLIP)
CHO: He is said to be an avid hiker and runner. FBI officials say dogs have tracked Ibens' scent near the Verdugo Mountains that is east of Burbank.
But authorities have since widened their search and as I mentioned, they're now looking throughout Los Angeles County, but of course, a very big mystery.
Why would this FBI agent, seemingly well liked by colleagues, a father and husband, vanish into thin air? Why would he leave, Ali, the big question and more importantly especially for his family where is he now? And those are questions we can't answer.
VELSHI: What do we know about his history of the FBI? How long he's been there and what he's done?
CHO: He's been there three years. He focuses interestingly enough on national security, counterterrorism cases to exact. He is said to be a valuable member of the team, never had any disciplinary problems. And before that, he was an L.A. police officer for eight years so very long history in law enforcement.
VELSHI: Solid career, family you said, you know, he's got family?
CHO: That's right, and this is what makes it all so confusing, seemingly a solid career, a family man, father of a 1-year-old son, married, as I mentioned.
In fact, it was his wife who reported him missing on Friday morning, at about 7:30 in the morning. And she has told authorities that the last time she saw her husband, Ali, was when she went to bed Thursday night. She woke up the next morning and he was gone.
VELSHI: What a story, it is very strange and the manhunt continues. Thanks, Alina.
CHO: You bet.
VELSHI: All right, Zoraida.
SAMBOLIN: Thank you very much. It is 12 minutes past the hour.
One of the highest ranking women on Wall Street is expected to step down as early as today at JPMorgan Chase. According to several reports, chief investment officer, Aina Drew will resign over the firm's staggering $2 billion loss.
And according to Bloomberg the London staff of the company's chief investment office could also be dismissed. CEO Jamie Dimon confirming the banking giant could lose another $1 billion from risky trades before everything shakes out.
So how could this happen at JPMorgan Chase, just two years after financial reforms? At 7:00 Eastern on STARTING POINT, we'll ask former FDIC Chairwoman Sheila Bair.
And U.S. Senate candidate, Elizabeth Warren will join us in the 8:00 a.m. hour. She is credited with the idea for the Consumer Financial Bureau and we'll ask her why she's calling for the CEO of JPMorgan Chase to resign.
At least four wildfires burning across Arizona, each fuelled by gusty winds and tinder dry terrain. The largest blaze, the sunflower fire in the Tanto National Forest has grown to some 2,700 acres despite a large ground and air offensive.
Authorities in Mexico trying to calm the public assuring them that civilians are not being targeted. After the gruesome discovery of 49 decapitated and dismembered bodies, littered along the Mexican highway. The killings believed to be the work of a drug cartel, the bodies discovered 80 miles from the U.S. border.
Students in Boston University holding a candlelight vigil to remember three classmates killed in a tragic car accident in New Zealand over the weekend.
Five other BU students were also injured. They were part of a group that was studying abroad. The students on a sight-seeing trip to one of New Zealand's national parks when that crash occurred.
The U.S. Army is now placing women in combat, opening 14,000 combat-related jobs to women, that is starting today. Six new military occupations are now open to women, including intelligence, sergeant, and health care sergeant. Still 30 percent of Army jobs will remain restricted to men.
If you're leaving the house right now, you can watch us any time on your desktop or your mobile phone. Just go to cnn.com/tv -- Ali.
VELSHI: And if you're going further than just to work, if you're traveling anywhere in and around the northeast this week, rain could be a factor. Alexandra Steele now with today's weather. Good morning, Alexandra.
ALEXANDRA STEELE, AMS METEOROLOGIST: Good morning to you, Ali.
Hey, you said it right. I mean, you're going to walk out the door in the Northeast in the mid-Atlantic and the South ensconced in clouds and rain and fog, so really a slug of a go, really just a rain train, parade of moisture, the rain moving over itself from Charlotte to Greensboro to Knoxville and from the Catskills in New York state, all the way down to the Smoky Mountains, we're going to see even in enhanced rainfall.
So, if you live in those areas you'll see a lot because of the aerographic lifting of the mountains. One to two inches, could see three to four.
Here's the rain in New York, right now dry, but especially in and around the New York Metro is a very slow go not only today but tomorrow as well so the last two days. Where we've seen the rain in the Gulf Coast, south through Atlanta we saw so much rain this weekend in the Southeast.
But as we head from today into tomorrow, here's the rain along the 95 corridor, and even inland a little bit. That's where that moisture is really building up, and that's where the mountains are. So, the 95 corridor is wet, to the west of it certainly a heavier amount of rain -- Boston to New York to Philadelphia.
So, big picture today, there is the rain in the Northeast, mid- Atlantic and southeast. We didn't talk about the heat but Phoenix, 103 yesterday, 94 is the average for phoenix, 100 degrees for the next four days and getting down into the upper 90s so the heat really on big time here, some showers moving into the West, temperature department, Los Angeles at 73, really it's kind of that Phoenix area that's seeing the intense heat, southwest Arizona.
But biggest travel troubles today, there it is, New York metros, Philadelphia also, Atlanta, Georgia, kind of clouds, low clouds this morning, we're going to see that throughout the afternoon. San Francisco, low clouds there. But in and around New York if you're traveling to or through, bank on some long delays today.
We'll talk more about the forecast and EARLY START has much more in just a bit, right?
VELSHI: Alexandra says 103, 104 in Phoenix. All that goes through my mind is all of sudden, dry (INAUDIBLE) love that.
SAMBOLIN: I love that kind of weather.
STEELE: One degree with the records is huge, 94 where they should be to 103 is a record or whatever it is, one degree differential in the Southwest is really a big deal now.
VELSHI: Zoraida can have it. I'll stay up here in the gloomy, wet Northeast. Thanks.
SAMBOLIN: (INAUDIBLE), right/
VELSHI: Thanks, Alexandra.
SAMBOLIN: Let's show in the other half, love it, thank you.
VELSHI: All right. No surprise that Yahoo!'s CEO has quit amid the resume padding scandal of his. The shocker however is what that CEO Scott Thompson told the board of directors on his way out the door. We'll tell you about it, after the break.
SAMBOLIN: And for an expanded look of our stories, head to our blog CNN.com/EarlyStart.
(BEGIN VIDEO CLIP)
UNIDENTIFEID MALE: There's no one in the history of this country who has done what he's done, in the last two centuries. I think he got the MacArthur Foundation prize because there's nobody like him.
UNIDENTIFIED MALE: I told my wife and me there is a monetary award over a period of five years of $500,000. She said it's a joke. I hope I can thank them with my work, with my dedication.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
SAMBOLIN: It is 21 minutes past the hour, we are minding your business this morning.
U.S. markets closing lower for two weeks in a row now. The Dow lost about 30 points, the NASDAQ almost flat, and the S&P 500 also closing in the red.
VELSHI: U.S. stock futures are once again sharply lower this morning, lots of uncertainty in the markets globally. The particularly focus is once again on Greece. Negotiations are continuing. They don't have a government yet.
Christine Romans is here. She's not going to talk about Greek.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I will say one thing about Greek, my one thing to know, only a $300 billion economy so small but the fact that Greece could be a big concern euro, the eurozone and for us, shows you the world is a big and small place at the same time.
VELSHI: Yes. And when was the last time Greece was this influential in the world?
ROMANS: I think back when they start of the Olympics.
VELSHI: Yes, the original Olympics.
ROMANS: Right.
VELSHI: But you are talking here about Yahoo!, the CEO finally out the door, most of us guessed this was going to happen.
ROMANS: Yes, it's been a couple weeks coming. Look, he said he had a computing science and accounting degree from Stonehill College, it's been in company documents both at PayPal, where he was before and then now at Yahoo!. By the way, company documents have to be sworn to be absolutely truthful by the CEO.
VELSHI: Right.
ROMANS: He only has a degree in accounting, sounds like a small thing but there was an investor in this company who has been trying to wrangle some seats on the board, brought this up.
VELSHI: Because he's generally frustrated about the company.
ROMANS: Let me show you why the investors are generally frustrated. Yahoo! stock over the past five years. I've got a chart for you. And it shows you that the stock is down some 44 percent over the past five years.
It's down 11 percent over the past year. So, what they're saying is, come on, we want to have a better say, and they dug up this stuff about his past. Now here's where it starts to get unfortunate and pretty interesting as well. "The Wall Street Journal" is reporting he has informed the board, Scott Thompson informed the Yahoo! board he is beginning treatment for thyroid cancer.
So, his credibility and his resume under fire for the past couple of weeks, investors wanted him out after a tumultuous year I would say at Yahoo! in general. And now, he's got according to "The Wall Street Journal" a medical issue to deal as well.
SAMBOLIN: It's a head scratcher why he would lie on his resume. Originally I thought he didn't have a degree but he does.
ROMANS: You know what? It's a head scratcher, but it's interesting. We talked to a lot of human resources management type folks. There is he a lot of different surveys on this as well.
More people lie about their experience and their degree than you would expect. Education is the number one reason why people lie on their resume and the second reason is what kind of experience they have or what their job was at a particular company.
And one of the reasons why people lie so frequently about what their degree is, is because they're trying to make it match what they're trying to get. I don't know what Scott Thompson was doing. The company called it an inadvertent biographical error.
VELSHI: You said something very interesting, Zoraida, that Scott Thompson is 54 years old. Most people who are Internet savvy, you would think the CEO of Yahoo! is, would know you can find out the real information on anybody for no money.
ROMANS: And why would you have to embellish a degree, when Steve Jobs dropped out.
VELSHI: Accounting degree is not a silly degree.
ROMANS: He's got a track record and he ran PayPal.
The take-home advice to me is everyone goes through their resume, you know, especially if you're trying to get a new job, because in this day and age, for $10 on the Internet everyone can find out anything about your academic history.
(CROSSTALK)
SAMBOLIN: And when you're young and savvy and got a good product that the degree doesn't necessarily matter as much.
ROMANS: Best of luck to him and his family as he begins treatment for thyroid cancer. So, a very complicated story. They got more complicated this morning.
SAMBOLIN: Thank you, Christine.
ROMANS: You're welcome.
SAMBOLIN: It is 25 minutes past the hour. Ahead on EARLY START, "Newsweek" magazine creating quite a stir, calling Barack Obama the first gay president.
Stay with us.
(COMMERCIAL BREAK)
VELSHI: Good morning. And welcome back to EARLY START. I'm Ali Velshi.
Here's what's happening at half past the hour.
JPMorgan Chase chief investment offer Ina Drew expected to resign as early as today in the wake of company's staggering $2 billion loss and according to Bloomberg, the firm may dismiss its entire staff at the chief investment office in London.
CEO Jamie Dimon says no investor money was lost. JPMorgan Chase's stock however which does involve investor money took a 10 percent dive on Friday. Risky investments could lead to another $1 billion in losses at the company.
John Edwards is not expected to testify when the defense begins presenting its case this morning in the former North Carolina senator's corruption trial. His lawyers argued for a mistrial Friday claiming prosecutors failed to prove their case. The judge denied the motion. It's not clear which witnesses the defense plans to call.
An Arizona fire crew is fighting to contain four separate wildfires across the state. The fires all being fueled by high winds, excessive heat and bone dry conditions -- Zoraida.
SAMBOLIN: Thank you very much.
The cover of the latest edition of "Newsweek" magazine has everyone talking this morning. Have you seen it? We'll show it to you here.
It features President Barack Obama with a multicolored rainbow over his head and the words "The First Gay President."
It comes a week after President Obama made history by publicly supporting same-sex marriage.
Dan Lothian is live at the White House with more details for us this morning.
And, Dan, this isn't the first time "Newsweek" comes out with a controversial cover.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Not at all, but this one is quite provocative and we can expect that everyone will be talking about it today. It's written by Andrew Sullivan. It's an issue expected to come out May 21st but we now have that cover. You had a chance to say it there.
It talks about what was behind the president's decision and what it really means and it comes after a weekend where you saw across churches in the country, African-American churches, ministers, really struggling with the president's decision to come out and publicly endorse same-sex marriage. These ministers, some of them, pulling back their support from the president, others saying that while they disagree with Mr. Obama, they will still support him.
So, there's still that division there among African-American ministers. Expect this conversation to continue. The president heads to New York today, where he'll visit Barnard College. He'll be delivering the commencement address there, also receiving that school's highest award, which is the Medal of Distinction. Along with the president, a prominent gay rights advocate will also be receiving that award.
And then the president appears on "The View," and will be attending two fund-raisers, one of them will be hosted by Ricky Martin, of course, who came out openly gay entertainer came out a couple of years ago.
SAMBOLIN: I figured that Ricky Martin fund-raiser should be a lot of fun.
It should be. I think what you will hear is this conversation continuing from the president. It's in that, you know, environment where these are people who have supported the president now for quite some time. They've been putting a lot of pressure on the president to speak up, and speak out on this issue.
He's finally done that so we can expect that conversation to continue, and perhaps the president talking a little bit more about what went into his decision.
SAMBOLIN: It's interesting also in the "Newsweek" article the contributor that you were talking about, Andrew Sullivan, says that this is not an aberration. It was inevitable, a culmination of three years of work for the president to actually come out in support.
That's right, and he talks about going way back to when the president was first thinking about running at a fund-raiser or a meeting that the president held, that he had a chance to go in and get a chance to really meet the president. And during that meeting, someone asked the president about what he would do for her son, who happens to be gay, and if he wanted to marry someone.
And at that time the president was very strong in his conviction that this was something that could probably be taken care of by civil unions, and he did not feel that you needed same-sex marriage to fulfill what he thought was a quality for gay couples but we have seen the president over the last couple of years was going through this evolution finally last week coming out with his decision, and now everyone's talking about it.
SAMBOLIN: Yes, which I think is actually a good thing, all of the dialogue.
Dan Lothian live for us in Washington, D.C. -- thank you very much.
LOTHIAN: OK.
VELSHI: The fallout over Morgan Chase's $2 billion blunder cost the chief investment officer of the company her job. Now, are other big banks making the same risky bets? Because if they are, that's where it affects you, that's where it could affect the economy. You don't care about Morgan Chase you should.
We'll tale you more about it after the break.
(COMMERCIAL BREAK)
VELSHI: Good morning, New York. If you're not awake, wake up. But if you're not awake, you weren't around to hear me say that anyway so it's a useless thing to say. Sixty-six degrees right now. It's going to go up to a balmy 69 with some showers.
Gloomy, overcast day particularly for one person, one of the highest ranking women on Wall Street is expected to resign from her post at JPMorgan. Her name is Ina Drew. She is the bank's chief investment officer. She ran the risk management division or she oversaw it at least, responsible for the bet that cost the nation's largest bank $2 billion, probably more.
Her resignation coming days after the bank acknowledged its risky trades that they say were intended to protect the bank from financial risks, and had turned sour. That has a lot of people asking just five years after the financial crisis brought this company and some of the world to its knees -- how could JPMorgan get it so wrong? Are other banks making the same risky bet and could it crater the economy again?
Peter Morici is a professor of international business at the University of Maryland. He's a former economic director for the U.S. International Trade Commission and has some strong, strong words about this.
Peter, in terms that our viewer, still sleepy time for some of them at 6:30 in the morning, can comprehend because we don't deal in credit default swaps and we don't deal in some of the complicated things, what's your take on what happened and what should happen to fix it in.
PETER MORICI, UNIVERSITY OF MARYLAND: Let's look at what happened. Essentially, Morgan miscalculated and was hedging against risks on the other side of those trades were hedge fund managers who were gambling.
Now, cow could Ina Drew be hedging and the hedge fund managers gambling at the same time? The answer is they were both because it's not possible for the banks to put in place risk managers that can fully understand the market with it evolving so rapidly to avoid these kinds of calamities from happening.
The bottom line is this can't be regulated, and the banks that take deposits and make loans with your money need to be separated out from these investment houses that engage in this kind of activity.
VELSHI: And that's the distinction. That is the clear distinction. It is not illegal to simply gamble. It's not illegal to bet on the direction that something will go in, whether it's an economy or a market or a certain type of loan.
But it's dangerous if they take other people's money and it starts to become intermingled. In other words, something probably bad isn't going to happen to Morgan Chase, but it could and that could end up affecting a lot more people.
MORICI: Worse than that, Ina was making $15 million a year and now she works in the same place as a banker who makes loans and takes deposits and things like that. You know, Wells Fargo, very straight laced
(VIDEO BREAK)
VELSHI: There is a distinction to be made here then that these banks are taking their own what they call their own money. The CEO of JPMorgan Chase Jamie Dimon said this wasn't customer money. This wasn't investor money.
Is that a fair distinction?
MORICI: I don't know that it is. We've seen in the past where traders for example, Barings Bank in Britain, the most venerable bank in Britain, was brought down, pushed into bankruptcy by a trader who basically bet the house. I don't believe that you can put in place investment officers that can keep that from happening.
If you could, then why did Ina Drew let this happen? I'm not saying she's a bad person or she didn't have good intentions, but the fact of the matter is no one has that kind of understanding of a gambling situation or the person on the other side wouldn't be making the bet against you.
VELSHI: But, Peter, Ina Drew is reported to have been the kind of person who instituted these practices to protect themselves, to hedge. Christine Romans this morning was making a distinction between hedging and betting -- and the hedging is because you've got some interest in the underlying thing that you're making a trade on, and the betting is that you're just betting on the direction of something you don't have anything to do with.
MORICI: Well, when you hedge, you are making a bet. Look who was on the other side of the trade, hedge fund managers who essentially do bet. My bottom line is they have dressed this up to look like something that it is not.
Jamie Dimon is running a casino in this aspect of the bank. That's fine, because actually you can serve some useful purposes in the economy that we can't get into with the time that we have by doing that. But those useful purposes should not be served by the people that take your deposits and those deposits are then guaranteed by the FDIC, the federal government.
As I put it, when I go to the bank and put my money in, I don't want to see say slot machine in the lobby.
VELSHI: Good point. Peter Morici, good to see you as always. Thanks very much. Peter Morici is a professor of international business at the University of Maryland and a former economic director at the U.S. International Trade Commission -- Zoraida.
SAMBOLIN: Thank you very much.
Forty-two minutes past the hour. Let's get you up to date. Here's Christine Romans.
ROMANS: Good morning again, Zoraida.
I'm going to start to the 2012 fire season in Arizona, at least four wildfires burning across the state fueled by high winds and extremely dry conditions. The biggest one has scorched nearly 3,000 acres, despite an air attack and hundreds of firefighters on the ground there.
Trouble at the top for Yahoo! The Internet company removing its CEO Scott Thompson in the resume scandal. Thompson claimed to have a computer science degree when he didn't, being replaced by Ross Levinsohn.
"The Wall Street Journal" reports before Thompson left, he told the board he had thyroid cancer.
Washington state giving out free vaccinations to battle its whooping cough outbreak. Doctors say a shot doesn't guarantee you won't get sick but could make symptoms milder, make you less likely to infect someone else. So far, there have been no deaths linked to whooping cough but "The New York Times" reports more than 1,200 cases through early May.
An Ohio teen scores a prom date with an NFL player! Eighteen- year-old Joyce Grendel asked Cleveland Brown Joe Haden to the dance via Twitter. She said it was a last ditch effort to get a date after he backed out. Haden said he was the one who was nervous.
(BEGIN VIDEO CLIP)
JOYCE GRENDEL, ASKED NFL PLAYER TO FROM: Hey, Joe, would you consider going to my senior prom with me because my date backed out and didn't go. This is bigger than I ever imagined.
JOE HADEN:, CORNERBACK FOR THE CLEVELAND BROWN: I am nervous, taking pictures with me and her family and everything, I feel like we were legit, does this look cool and everything, right? I feel like this is my prom, too.
(END VIDEO CLIP)
ROMANS: Haden says he never attended his own prom because he graduated high school early.
Today's best advice for you comes from actress and producer Virginia Madsen, a nice follow-up for you to Mother's Day.
(BEGIN VIDEO CLIP)
VIRGINIA MADSEN, ACTRESS & PRODUCER: Best piece of advice certainly would have to come from my mother, and she told me to always listen to the voice inside. And as I grew up, I found that to be very true, because she said, you always know what's really right and what's really wrong. So listen to yourself and you'll know what to do.
(END VIDEO CLIP)
ROMANS: I don't know, I love this little segment, giving you a little something you guys take to work with you, take it or leave it. But a little advice from someone we talked to. We talk to interesting people here at CNN.
SAMBOLIN: I love that. This is one of my favorite segments, so thank you. We appreciate it.
All right. Brooke Baldwin is in for Soledad O'Brien. She joins us now with a look at what's ahead on "STARTING POINT."
BROOKE BALDWIN, CNN ANCHOR: Hello, it's not good to be here bright and early. It's not all money.
Good morning to you and good morning to all of you. So, ahead on "STARTING POINT," I know you've all been talking a lot about this morning this $2.3 billion mistake by JPMorgan. So, this morning, we're going to talk to Elizabeth Warren who you know -- she headed up the TARP program.
She's currently running for Senate in the state of Massachusetts. She is now stepping forward and calling on JPMorgan's CEO, Jamie Dimon, to resign from his post on the board of the New York Federal Reserve bank. Certainly news-making interview there.
Also, awful story, this 24-year-old grad student from Georgia fighting of this flesh-eating bacteria. She's lost her leg at the hip. Her family fears, this morning, she might lose her fingers as well. So, we're going to talk to her parents to see if there's anything possibly to be learned from this.
And, I know it's early, but we're talking math. The question we're asking you, are you smarter than an eighth grader? Riddle me this. A bag of coins containing only pennies, nickels, and dimes, Zoraida is like why are you asking me this at 6:45 in the morning? With at least five of each, how many different combined values of five coins were selected at random?
SAMBOLIN: What?
BALDWIN: I know. But I'm telling you this kid is going to have the answer in like zero, you know, seconds flat. So, we're going to talk to the winner of this national math competition. We're going to put him in a certain member of our panel to the test so that should be some good TV.
(LAUGHTER)
BALDWIN: And that is coming up in about ten minutes. Look forward to it.
(COMMERCIAL BREAK)
SAMBOLIN: Welcome back. Forty-nine minutes past the hour. A Georgia woman is now in danger of losing her fingers to a flesh-eating bacteria. Twenty-year-old Amy Copeland (ph) became infected earlier this month after a zip lining accident over the Tallapoosa River. That's near Atlanta. Copeland suffered a gash that became infected with the potentially deadly bacteria.
She's already lost a leg and she's also lost part of her abdomen. Her family says that they are optimistic awaiting what they're calling Amy Day. George Howell joins us now live from Atlanta. And I got to tell you, George, when we're listening to all of the details here and we hear that the family is optimistic, we can only think that they thought at some point she was going to die. GEORGE HOWELL, CNN CORRESPONDENT: Well, indeed, they had reason to believe that, especially after that surgery where she went into cardiac arrest and had to be resuscitated, but this morning, I spoke with Andy Copeland, Amy's father and he told me this. Now, the family has been able to start reading lips.
They've gotten good at this over the last few weeks, and they were able to understand two questions, just last night. First, Amy was asking about her thesis. She's pursuing a master's degree in psychology, so she was concerned about her course work there, and she also asked about her job, concerned that the time that she's lost could count against her.
Her father says it's an example of her work ethic, and obviously, reassured her that she will be OK. People understand given what she's gone through. But Zoraida, as you mentioned, this happened about two weeks ago when she was out with friends on a zip line that snapped then a gash that resulted on her left leg, this flesh-eating bacteria, got into it.
And obviously, the wound was closed up, but days later, she was back in the hospital, fighting for her life with this disease.
SAMBOLIN: OK, George, so, you know, this is scary, because, you know, a lot of people zip line, and you know, they fall and they get gashes. And so, what do we know about this flesh-eating bacteria.
HOWELL: Well, you know, the question at this point is where did the flesh-eating bacteria get into her leg? Was it in the natural environment? Was it somewhere else? At this point, obviously, that is something that doctors will want to look into, but right now, Andy Copeland says his focus is specifically on his daughter's health right now.
He's not asking those questions. He just wants to make sure that he's there with his daughter, there with her as she progresses, and he is optimistic that she will progress.
SAMBOLIN: That's great news. Is she breathing on her own yet? Are we waiting for that to happen?
HOWELL: Not at this point. We know that she had 100 percent oxygen put into her lungs after this. She's improved of to 33 percent. Now, that is just shy, 12 percent shy of 21 percent oxygen, which is the oxygen level around us. That will be, as you mentioned earlier, Zoraida, Amy Day. That's the day that her father hopes to see the tube come out so that she can, at least, start talking again. They can hear her voice.
SAMBOLIN: Yes. We'll celebrate Amy Day. George Howell, thank you so much for that.
And coming up at 8:00 a.m. on STARTING POINT, Amy Copeland's parents will be live with more insight into their daughter's case.
ALI VELSHI, CNN ANCHOR: All right. Plenty of people have been trying to picture this because it's somebody whose face we know so well, Steve Jobs. Ashton Kutcher acting as the Apple icon, Steve Jobs, in a movie. See what he looks like in costume. You think he looks like Steve Jobs? Not here. We'll show you some pictures afterwards and you might think so.
SAMBOLIN: And listen up, if you are leaving the house right now, you can watch us anytime. Take us with you. We'll be on your desktop or your mobile phone, just go to CNN.com/TV.
(COMMERCIAL BREAK)
VELSHI: I'm going to smack myself. I had one opportunity to see "The Avengers." I had a little bit of downtime, and I didn't do it, because I don't really care --
SAMBOLIN: Everybody else did.
VELSHI: Everybody else did. "The Avengers" continuing to prove their powers at the box office. You got to see these numbers, they are quite remarkable, topping a billion dollars on Sunday. The superhero blockbuster was number one with moviegoers for the second straight weekend. Disney unsurprisingly says there will be a sequel.
SAMBOLIN: This is a meteoric rise they had. I mean, we have other million-dollar movies, but they got there really, really fast.
And we have a first look at Ashton Kutcher as Steve Jobs. Kutcher is playing Jobs in an upcoming biopic, and he looks just like him in the iconic black turtleneck. TMZ posted these photos taken on a movie set in Los Angeles. The biopic is set to come out at the end of this year. It's tentatively titled "Jobs: Get Inspired."
VELSHI: I suspect many people will see that as who has bought the book. It's going to be a big, big movie.
SAMBOLIN: Yes.
VELSHI: All right. On "SNL," the burning question about "Time" magazine's now famous breastfeeding cover. Take a look.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Really "Time" magazine? This is the image you went with for Mother's Day? And really, what's with the camouflage pants? You do realize there's not enough camouflage in the world to hide from the blow back this kid is going to experience.
(LAUGHTER)
UNIDENTIFIED MALE: And "Time," don't get me wrong, I understand you have to do what it takes to sell magazines, and it's a good cover, but if you wanted a great cover, you would have Photoshopped out the chair.
UNIDENTIFIED MALE: I mean, really.
(LAUGHTER)
UNIDENTIFIED MALE: Joe, you've been locked inside your room all day. What's wrong?
UNIDENTIFIED MALE: What's wrong? Are you serious? Do you really not get it?
UNIDENTIFIED MALE: Does this have something to do with the whole gay marriage thing?
UNIDENTIFIED MALE: Ah, doy! It's not fair, OK? I was the first one who said it should be legal, but now you're the one getting all the credit.
UNIDENTIFIED MALE: That's not true.
UNIDENTIFIED MALE: Oh, yes? Oh, really? Then why are you all dressed up?
UNIDENTIFIED MALE: I'm going to a gala with Lady Gaga and Elton John.
UNIDENTIFIED MALE: Oh!
(LAUGHTER)
(END VIDEOTAPE)
VELSHI: And that is it for EARLY START, the news from "A" to "Z." That's convenient, wasn't it?
SAMBOLIN: Yes, Mr. Ali Velshi. I'm Zoraida Sambolin. Brooke Baldwin is in for Soledad O'Brien, and "STARTING POINT" starts right now.
