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American Morning
Asian Markets Recover; Government Considers Buying Into Banks; A Look at McCain's New Mortgage Plan; Main Street Versus Wall Street; The Value of Your 401(K)
Aired October 09, 2008 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Larry, thanks. It is 7:00. Right on the nose here on the East Coast. Some top stories we're following today after a chaotic day for world markets yesterday.
Things have calmed a bit this morning. In fact, in early trading, market in London, Paris and Frankfurt all gained at least two percent. Taking a look at the Asian markets, they closed with mixed but relatively stable results and right now checking out Dow futures still up 136 points right now.
The White House and Treasury Department are signaling that the federal government could take partial ownership in several U.S. banks in an effort to deal with the crippled credit market. The bailout passed last week, and it does grant that power. But Treasury Secretary Henry Paulson warns that not all banks are safe.
(BEGIN VIDEO CLIP)
HENRY PAULSON, TREASURY SECRETARY: Even with the new treasury authorities, some financial institutions will fail.
(END VIDEO CLIP)
CHETRY: Well, NATO officials meet in Budapest, Hungary, today and one thing to be considered, reaching out to members of the Taliban in Afghanistan who might be willing to deal with the country's government. Defense Secretary Gates and General David Petraeus, the incoming head of CENTCOM, both endorsed the idea.
And "The New York Times" reporting this morning that tens of thousands of voters have been removed or blocked from registering to vote in at least six swing states. The paper said that the voters' exclusion appears to violate federal law. The purge seems to be accidental. Violations include the improper use of Social Security data and also pulling voters from election rolls 90 days before a federal election.
JOHN ROBERTS, CNN ANCHOR: Well, have a look at this. Here's a real sign of the times. The nation's debt clock is so high that the clock in New York City detracts. It has run out of numbers.
The new bailout bill pushed America's plunge into the red past $10 trillion. A short-term fix was to change out the dollar sign which had the first part of the clock to a one. The Durst Organization which runs the clock plans an update next year. That should probably do as what, for a few months or so before they have to change it to a two? What do you think?
CHETRY: I hope not. Well, all right.
Well, Gerri Willis -- unless they have to add another, like, space, OK, so we can expand a little bit further to the left. Let's hope that doesn't happen.
Gerri Willis is here with us this morning taking a look at what we're going through right now. The Dow futures up slightly but you know, still a lot of concern.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Lots of concerns and, of course, the big story today is that the U.S. government may actually buy stakes in banks across the country. We've been talking about the credit crunch. The fact that banks aren't lending to each other, they're not lending to you. How do we solve the problem?
Well, Treasury Secretary Henry Paulson said yesterday that maybe what needs to be done is that the government actually buys stakes in these failing banks -- these banks that are under pressure -- and take a position in those banks. We had been talking about instead the treasury secretary and his minions buying up some of these failed mortgage-backed securities that banks own that are clogging balance sheets. Instead, they think that maybe doing this directly would save some time.
I don't know if you guys saw it. The bailout package, the language in that gave Paulson some 45 days actually to put together a plan to buy this mortgage, this bad mortgage debt. And I think that this would be a much quicker way to bring a solution to the crisis.
ROBERTS: All right. Well, we'll see what they do on that front this morning.
Gerri, thanks so much for that.
WILLIS: My pleasure.
ROBERTS: Well, the clock is ticking down to the election. Just 26 days to go now. The economy remains issue number one out there on the campaign trail.
Our Suzanne Malveaux is with the Democratic ticket. She is live for us this morning in Dayton, Ohio. What's on the agenda today?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, John, obviously Barack Obama is going to be talking about the economy, the economic crisis, the way that he feels is best to deal with it. We heard from John McCain offering a $300 billion plan to buy these mortgages directly. It's a plan very similar to what Hillary Clinton had suggested earlier in the campaign. Barack Obama saying it is impractical.
Now you have both of these candidates in the final four weeks of the campaign looking to these key Midwestern states. We saw McCain in Ohio, Pennsylvania, Wisconsin. Barack Obama yesterday in Indiana, now in Ohio. It is a worldwide, not worldwide but rather a statewide blitz that Obama is taking place. And what he's going to do is simply trying to make the case that he is the best leader when it comes to dealing with the economic crisis.
Well, John, we don't have -- we don't have the sound bite there. But obviously what he's talking about and what he has been talking about in the last couple of days since the debate is that he is saying that John McCain does not have the right prescription for the economy, for this economic mess. He partly blames him, but he says that he's looking at the $700 billion plan as just part of the solution.
The other part, he says, is tighter regulations for the financial industry. He's also talking about tax cuts for 95 percent of the American people. All of these things, he argues, is the best way in dealing with this financial, this economic crisis -- John.
ROBERTS: So, take us back. You said that yesterday he was in Indiana which is next door there. And this has been a Republican state for an awfully long time. Why is he in Indiana? Is he just trying to force John McCain to spend some money there to play defense, or does he think he actually could have a chance?
MALVEAUX: It's a bit of both, actually. I mean, they're trying to force John McCain, obviously, to spend some money in that state. Barack Obama has a huge financial advantage over John McCain, but they're also taking a look at the state and they believe that they might be able to make some inroads.
The socially conservative Democrats, the Republicans, and some of the independents, they believe in certain key regions of Indiana, they think they can turn them. So they think it's going to be pretty close and at least it's worth it to put John McCain in a position where he's got to use those dollars that he has, that he's really kind of running out fairly quickly -- John.
ROBERTS: Barack Obama has got so much money he can afford to play in some of these states, even if he might not have a real chance of prevailing there.
Suzanne Malveaux in Dayton, Ohio, for us. Suzanne, thanks so much.
CHETRY: Well, in Tuesday's debate, John McCain offered a dramatic proposal to try to deal with America's mortgage crisis. By all accounts, it's an expensive proposal. He even said it himself, and one that might sound vaguely familiar. Our Dana Bash reports.
(BEGIN VIDEOTAPE)
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): With the dragging economy pulling down his poll numbers, John McCain started the debate with this.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes. BASH: But McCain did not make it clear to the millions of voters watching that he was trying to unveil a new proposal, which advisers scrambled to explain the next day. Aides say McCain would order the government to spend $300 billion which would come out of the $700 bailout package on buying bad mortgages directly from homeowners. They would be provided with new fixed-rate mortgages so they could stay in their homes.
MCCAIN: Is it expensive? Yes.
BASH: Not only is this plan expensive, ordering the government to buy toxic mortgage is a major departure from McCain's conservative credo. In fact, it's an idea long pushed by liberal groups and despite McCain trying to use this to distinguish himself --
MCCAIN: And it's my proposal. It's not Senator Obama's proposal, it's not President Bush's proposal.
BASH: Hillary Clinton proposed virtually the same idea just last month and discussed it on CNN's AMERICAN MORNING.
(BEGIN VIDEO CLIP, CNN'S AMERICAN MORNING)
SEN. HILLARY CLINTON (D), NEW YORK: We also have got to give authority to rewrite these mortgages so that we go to the root of the problem.
(END VIDEO CLIP)
BASH: There are still a lot of unanswered questions about how the government would go about buying people's bad debt.
PENELOPE PATSURIS, CNNMONEY.COM: $200 billion represents I don't know how many millions of mortgages. So, I mean, is Hank Paulson going to be there or whoever is, you know, the treasury secretary, you know, signing off on everybody's mortgage individually? I mean I don't know -- that's -- it's just mind blowing.
BASH: While the details may be complicated, the politics for McCain are simple and obvious, helping homeowners, the voters, is politically popular. Bailing out Wall Street is not.
BASH (on camera): But McCain, of course, voted for the bailout. What is perplexing is why he didn't push for this mandate to directly help homeowners before the package became law?
Dana Bash, CNN, New York.
(END VIDEOTAPE)
ROBERTS: If you're like many Americans, your 401(k) has taken a huge hit. So what should you do? Leave it alone or bail out of the markets? We'll have the answer for you coming up.
Bailout backlash.
(BEGIN VIDEO CLIP)
CAROL COSTELLO, CNN CORRESPONDENT: If you really want to find out how the people on Main Street feel about the people on Wall Street, this is the place to find out.
UNIDENTIFIED MALE: They hate them.
(END VIDEO CLIP)
ROBERTS: Carol Costello hits Main Street to hear the "Voice of the People" and gets an earful.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP, "THE TONIGHT SHOW WITH JAY LENO")
JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Good news, Secretary of Treasury, Henry Paulson, called for calm today. He called for calm. The bad news, he made the call from the Cayman Islands.
(END VIDEO CLIP)
ROBERTS: Welcome back to the "Most Politics in the Morning." We are bringing you part three of our "Voice of the People" series this morning. Today, a huge issue that has been front and center during America's economic crisis, Main Street versus Wall Street.
Our Carol Costello is looking at the chasm that separates the two. She joins us this morning from Washington. Now this cat not just a chasm, Carol, but an awful lot of anger as well from Main Street.
CAROL COSTELLO, CNN CORRESPONDENT: Oh, I think that's an understatement. You know, the depth of -- well, let's call it dislike, Main Street feels for Wall Street didn't start with the bailout. That "us versus them" mentality was born a long time ago.
(BEGIN VIDEOTAPE)
COSTELLO (voice-over): Wall Street...
UNIDENTIFIED MALE: They need to really correct this system.
COSTELLO: ... versus Main Street.
UNIDENTIFIED FEMALE: We can't afford paying our bills.
COSTELLO: In one corner, fat cats. In the other, a very angry little guy, especially in Youngstown, Ohio.
(on camera): If you really want to find out how the people on Main Street feel about the people on Wall Street, this is the place to find out. JIM KROKOSKI, BAR OWNER: Without using vulgarity.
COSTELLO (voice-over): Jim Krokoski saved his hard earned money to buy a bar in Youngstown. He's a Reagan Democrat. Both parties covered his vote. But the state of the economy has made him a tough sell.
KROKOSKI: I don't think Barack Obama has the answer. I don't think Senator McCain has the answer. I really don't.
COSTELLO: But he knows who he blames for this economic mess. That would be them.
(on camera): How deep rooted is the dislike for Wall Street on Main Street?
DR. PAUL SRACIC, YOUNGSTOWN STATE UNIVERSITY: It's very deep rooted, and it goes back to the history. You know, the mills were everything in an area like this. It's where everybody went to work. Got out of high school went to work in these mills. And suddenly one day, the mills closed down.
UNIDENTIFIED MALE: Mondale doesn't even know we're alive.
COSTELLO (voice-over): The economy tanked in Youngstown. Unemployment rose to 21 percent, and the fat cats, the big companies, took their jobs away and never came back. And now Main Street says Wall Street, those same fat cats are messing it up again.
KROKOSKI: What did John F. Kennedy say in 1960? Don't ask what your country can do for you; ask what you can do for your country. Now it's turned around. The country has got to do everything for whom? Wall Street.
COSTELLO: Down the street at First Presbyterian Church, that anger concerns Reverend Nick Mager. He put up a sign to remind Middle America we're all guilty.
REV. NICK MAGER, FIRST PRESBYTERIAN CHURCH OF YOUNGSTOWN: Somebody made a joke about it that when we're pointing the finger at someone, there's always three that are pointing back at us. And for us to be able to see our own shortcomings is always predictably important.
COSTELLO: Krokoski gets that but he says he played by the rules, and he could still get burned.
Do you need help from Wall Street to make it?
KROKOSKI: No. If my partners and I can't make this go, then shame on us, we did something wrong. I'm not going to blame anybody else but ourselves.
(END VIDEOTAPE)
COSTELLO: And in case you're wondering, the last time I talked with Mr. Krokoski, he is voting Obama not because he's sold on Obama but because he likes Joe Biden. He was thinking of voting McCain but as he said, Sarah Palin ain't ready for prime time -- John.
ROBERTS: So, Carol, the folks there at that uniquely named sports bar, do they buy into the sales pitch on the $700 bailout program that it's not about Wall Street, it's about Main Street?
COSTELLO: Oh, not -- no, no. They -- to them they say, you know, nobody is going to come and bail out my business. They don't quite get that. It insults them.
The other interesting thing, this "us versus them" mentality has existed so long that when Barack Obama came to Ohio and talked about unity and change, Ohio really didn't get that. They want someone to fight for them but this unity thing they're not so sure. Trust is a real issue in Ohio.
ROBERTS: Great story this morning. Carol Costello for us in Washington. Carol, thanks so much for that.
And Carol is going to have our last report in our "Voice of the People" series. Tomorrow, she's going to be looking at an enormously important group of voters -- women. That's tomorrow only on AMERICAN MORNING.
Sixteen minutes now after the hour.
Taxicab politics.
(BEGIN VIDEO CLIP)
ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Taxi!
(END VIDEO CLIP)
ROBERTS: Zain Verjee takes the pulse of D.C. and goes for a ride with the United Nations of political pundits.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We, the little guys, are the ones suffering right now.
(END VIDEO CLIP)
ROBERTS: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: It's 20 minutes past the hour. We're going to fast forward now to see what stories will be making news later today.
At 8:30 this morning, Labor Department will be putting out its weekly report on initial jobless claims. Any number over 400,000 has economists talking recession. Now in New Orleans, the first of the new greenhouses in the Lower Ninth Ward devastated from Hurricane Katrina will be unveiled. The organization behind it, "The Make It Right Foundation" was the brainchild of actor Brad Pitt.
And Hurricane Norbert now an extremely dangerous Category Three storm. It's expected to turn toward Mexico's Baja peninsula later today. Landfall predicted for Saturday, but Norbert could change its course.
We're going to check in with Rob Marciano right now. He's tracking Norbert. Looks big behind you this morning.
ROB MARCIANO, AMS METEOROLOGIST: It's big, it's bad and it's probably going to be ugly. It's pretty strong for this part of the eastern pacific, a Category Three storm as you mentioned, a well- defined eye.
This was, at one point, a Category Four storm last night. So it will get into slightly cooler waters. Here's the coastline of Mexico. It's about 400 in change away from the Baja, and it's going to head in that general direction.
So here you go. We'll make that turn to the north and recurve it across the Baja over the weekend, likely making landfall as a Category Two storm. That's pretty rare for this spot, and then getting sucked up into the flow here into the U.S. So I think Texas and New Mexico will have a piece of this very strong system moving into the inter- mountain west that will interplay with this and will also bring some snow into parts of, say, Montana and Wyoming.
This is a pretty strong storm for this time of the year. We could see several inches, if not over a foot, in spots of western Montana, maybe close to Yellowstone Park there.
Hey, New Yorkers into Boston, we got some rain but it's heading out so you'll begin to dry out as the day rolls along. It should be a fairly pleasant day. Most of the rain is east and south.
Daytime highs today will not be terribly cool behind this front, 74 degrees. Expect 77 in New York, 69 degrees in Chicago and 76 degrees expected in Kansas City. If you're heading to Miami always nice this time of the year, 86 degrees on South Beach.
Kiran, back up to you.
CHETRY: That's where we'd like to be right now. That would be fabulous.
MARCIANO: That sounds nice.
CHETRY: Hey, do you have your own studio audience back there? I heard some hooting and hollering or sneezing perhaps.
MARCIANO: Well, they're easy to please and they've been drinking. The news room hard at work. CHETRY: Thanks, Rob.
MARCIANO: OK. See you.
ROBERTS: Well, everyone is worried about their 401(k). So how do you know whether to dump it and run? Our expert says it's all about your age.
Twenty-two and a half minutes now after the hour.
CHETRY: The experience debate.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We don't have time for on-the-job training, my friend.
(END VIDEO CLIP)
CHETRY: In a time of crisis, what matters most? Frank Sesno looks at the quality voters want in our next president.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Years on the job does not necessarily translate into good judgment.
(END VIDEO CLIP)
CHETRY: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: Asian markets are stabilizing a bit overnight a day after a frantic stock sell-off. In Japan, the Nikkei index closed down half a percentage point. Hong Kong's Hang Seng had a nice jump back up three percent.
Oh, it's another desperate day on Wall Street. The Dow losing another 189 points on Wednesday, a sixth straight day of losses. Dow futures do point to a higher opening this morning, though. And, of course, they did that yesterday, right?
Meantime, the Federal Reserve is lending troubled insurance giant, AIG, an additional $37.8 billion. That is on top of the $85 billion that the government lent AIG last month to prevent the company's collapse.
Nobody knows where it ends. And the realities of how far this financial crisis could go are very grim. Personal finance expert Suze Orman was on "ANDERSON COOPER 360" last night, and she painted a very somber picture.
(BEGIN VIDEO CLIP)
SUZE ORMAN, PERSONAL FINANCE EXPERT: I want you to think about the reality of this. For those of you out there who all you have is credit card debt, you're losing your home because you're behind on your payments, you can't make your car payment, you work in an industry possibly that you're going to lose a job in, you have absolutely no money and this keeps going on and you can't get another job, what are your going to do?
So it is very, very possible out there that you will start to see things not where there are bread lines like we saw, you know, and nobody have anything, but that a lot of people are out on the streets. I have people calling into my show that are actually starting to live in their car because they don't know what else to do.
(END VIDEO CLIP)
CHETRY: Wow. That picture of the financial meltdown scary to say the least. It's also taking a huge bite out of American's retirement savings. $2 trillion lost in the past 15 months that's left many people looking at their 401(k)s and wondering what to do.
Susan McCarthy is a financial adviser and the author of "The Value of Money" and she joins me this morning from Oklahoma City with some advice.
Thanks so much for being with us.
SUSAN MCCARTHY, AUTHOR, "THE VALUE OF MONEY": Well, thank you. It's a pleasure.
CHETRY: You know, when you hear things like that, you get scared and rightfully so. What is your macro take, I guess you could say, on where we are right now?
MCCARTHY: Well, you know, in my book, "The Value of Money," I talk about this incredible emotional connection we all have to our money and how it impacts our decisions. So my first piece of advice about where we are right now, is everybody take a deep breath. Take a deep breath. And then look at your personal situation.
How many more years do you have to work? How old are you? And really, even how much of your money is exposed, because we're having people call our offices, for example. People are scared to death that everything is going away but, in fact, not all of their money is in the stock market. So, look at your personal situation.
CHETRY: Right. All right. So let's take a look. Let's offer some things to think about...
MCCARTHY: Sure.
CHETRY: ... depending on your age. If you're in your 20s or your 30s, a retirement is far away on the horizon, what do you suggest?
MCCARTHY: Well, if you're in your 20s and your 30s, you're in a great situation because you have years to work. So, first of all, don't stop making contributions to that 401(k). Keep contributing to it. When the market goes down, that's beneficial to you because you get more for your money. So keep contributing, stay the course, and just keep the long view.
CHETRY: All right. If you're in your 40s or 50s, maybe looking to get a little bit more conservative, what should you be thinking about then?
MCCARTHY: Yes. You know, you maybe want to be a little bit more conservative then. That's when you want to get really serious about your asset allocation, how much is in stock, how much is in bond. There's no substitute for working with a good adviser here who can help you project forward, how much you're going to need, when are you going to need it, what you need your money to do. But that's when you really want to get serious, especially in your 50s, about securing some of the money that's in that retirement plan so that you can have access to it when you retire.
CHETRY: What do you do for people who say, you know, I don't know if I have the money to go find a financial adviser. Are there any low cost alternatives to that?
MCCARTHY: Well, there certainly are. I mean, you can ask around. There are certainly some people who will help you. And there are also some wonderful books out there. "The Value of Money," of course, is one of them. But there are some great books out there to help you. Just simple primers. And another thing that people can do is work with whoever provides the 401(k) for your employer. They generally will provide some instructions, some assistance or some people that you can talk to and that's for free.
CHETRY: Well, that's a good idea.
And lastly, advice for retirees. These are the people that are probably the most nervous right now -- people that are starting to, or really close to having to draw on this income and seeing their nest egg shrink.
MCCARTHY: Right. That is very scary and hopefully those people don't have all of their money in the stock market. Sometimes it's driven by how much income they need. If you can have a portion of your money that's producing income and isn't in the stock market, then you can go ahead and have some money in the market and not worry about it too much. Once again, I think you just really need to stay on top of it and work with a good adviser who can help you.
CHETRY: Susan McCarthy, "The Value of Money," thanks for being with us this morning.
MCCARTHY: Well, thank you.
ROBERTS: It's 30 minutes past the hour now. And here are this morning's top stories. Firefighters battled a massive blaze near Oceanside, California. The wildfire was on Camp Pendleton Marine base in northern San Diego counties. Special helicopters were flown in to help put out the mile wide flames. Authorities in Nevada have raided the state headquarters of a non-profit that registered voters focusing on low-income citizens. The group Acorn is accused of falsifying forms with bogus names and addresses including the names of celebrities. An investigation is still ongoing. And John McCain says his new plan will help homeowners struggling to make mortgage payments. McCain first mentioned the mortgage plan at Tuesday's debate in Nashville and he took it on the road to voters yesterday.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: The United States government will purchase mortgages directly and immediately from homeowners and mortgage services and replace them, replace them with manageable mortgages that would give rates that people can afford.
(END VIDEO CLIP)
ROBERTS: Barack Obama is rejecting McCain's mortgage plan calling it costly and out of touch and he told ABC's Charlie Gibson it's vital that the next president restore trust in our financial institutions.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We now have irrational despair. That's again why it's so important for the president to be able to restore a sense of confidence and to help change the mindset of traders, the markets.
(END VIDEO CLIP)
ROBERTS: The latest CNN poll of polls nationally shows the race tightening up just a little bit. Barack Obama is leading John McCain 48 to 44 percent among likely voters, eight percent say they are still undecided. McCain was behind by six points earlier this week.
Throughout this campaign the argument of experience has been tossed around a lot at both Barack Obama and Sarah Palin. But at the end of the day do voters really care all that much? Our special correspondent Frank Sesno joins us now live from Washington with that.
Good morning, Frank.
FRANK SESNO, CNN SPECIAL CORRESPONDENT: Good morning, John. The question is do voters care about that is really a big question because they both so often from the gut. And right now the gut is filled with fear because of what's going on out there. Conservative columnists David Brooks recently took a real shot at the Republican party. He said not only do people deserve the candidates not embrace experience they don't embrace ideas. So the question is ideas, experience, how much do they count?
(BEGIN VIDEOTAPE)
SESNO: Campaign 2008 brought to you by market meltdown, bankruptcy, government bailouts, war and warming. If ever there were a time when experience matters this it is. Which is why we hear -
MCCAIN: We don't have time for on the job training, my friends.
SESNO: He aimed that one at Obama but careful it could also apply to Palin. Experience is a funny thing. We want our brain surgeons to have it. Might prefer it if she went to Harvard. We want our car mechanics to have it. Our Generals. Event he guys on the roof. If they've done this before we figured maybe the water will stay out.
In Europe politicians have tons of experience. They have to rise through party ranks before they can lead. But Jimmy Carter, Bill Clinton, Ronald Reagan, all of them came to Washington as outsiders, almost no national experience.
KIRON SKINNER, POLITICAL SCIENTIST: The outsiders critique the system, says things that we like to hear. It also gives us hope to know that someone who is not part of the machine can come to command the electoral center. It says that anything is possible in this country.
SESNO: It reflects our history of individualism, our distrust of government. So how do we weigh political experience now?
SKINNER: Years on the job does not necessarily translate into good judgment. And judgment is what really the presidential election is about.
SESNO: Barack Obama plays the judgment card every chance he gets. John McCain is trying to trumpet with his unique brand of experience. Both are running as outsiders. Part of a long tradition. But with anxiety in the streets there will be a short future for anyone who doesn't credibly address the trouble we're in.
(END VIDEOTAPE)
SESNO: John, I don't think we've seen a bar this high for presidential candidates maybe in our lifetime. Certainly not in my lifetime. With as much anxiety as I mentioned a moment ago as we got out there judgment and experience never mind the change but judgment and experience are going to be measured as dramatically and harshly as we've ever seen.
ROBERTS: Right. But even if people looking at the pool of ideas, are there the ideas out there that make voters comfortable?
SESNO: No.
ROBERTS: Because on both sides people are saying hey we're not hearing what we need to hear.
SESNO: Right. Because what would you say? I mean, you know, the markets are melting down and the Treasury throws $700 billion at it. They continue to meltdown. Banks around the world lower their interest rates. They continue to meltdown. And as I've said with you, John, and every place I can a thousand times, this is so personal, people actually get it because they see their lives changing. So the candidates aren't saying things partially because there is no simple answer. There is no single sound bite that's going to do it and partially I think we're in unchartered territory here.
ROBERTS: Yes. I read a story this morning that said that the most effective direct mail advertising has nothing to do with the campaigns it's your monthly 401(k) statement.
SESNO: I mean, imagine this, John. Very quickly. Imagine this, imagine if the candidates said what the real case was? You know what folks, we actually don't know what's going to happen here. It's probably going to get a lot worse before it gets better. And you know what? We're just going to do the best we can. That's not very reassuring.
ROBERTS: Yes. It's not. But at least it could be real. Frank Sesno with that terrific piece. Great perspective. Frank, thanks so much.
SESNO: Thanks, John.
CHETRY: Speaking of money woes. Our Gerri Willis is logged on and she's taking questions about your money right now.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey, we're talking 401(k)s. First time home buyers is now your time. There's still time to get your questions in. Log on to CNN.com/am. The answers are coming after the break.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
DAVID LETTERMAN, "THE LATE SHOW WITH DAVID LETTERMAN": I'm beginning to worry about my accountant. I go to his office today because I'm a little jittery, I'm a little jumpy about things. I walked in and the guy, honest to god, my hand to god, is using cardiac paddles on my portfolio. Come on, come on.
(END VIDEO CLIP)
CHETRY: Yes. And all the cardiac paddles in the world unfortunately aren't helping right now. That was David Letterman making light of the financial crisis. Hopefully Gerri Willis can make us feel a little better about it too because she's answering some of your money questions this morning. And a lot of people seem to be asking the same thing. What do I do?
WILLIS: Yes. There's a whole lot of that. But you know, some people have good problems. Like we have this question from Lorena in Georgia who asks "I'm looking to purchase my first time home. Should I buy right now? Some people tell me it's a great time to get a deal, others tell me to wait until the real estate market bottoms out in a year or two?"
Here's the deal, Lorena. Look, median prices have dropped to $196,000. That's good news for you. Prices are down absolutely. But you'll probably have a hard time getting a loan because of the credit crunch. It's difficult out there right now to get money from banks.
So what you should do is gather information not just the information you need for getting that loan in the first place but also information about the market itself. Have prices tanked enough to make it attractive to you in your home town to get a home. Contact a real estate agent. Start getting the data you need to make the right decision.
And Richard in Texas writes, "I'm 62 and wanting to retire. I have $100,000 in government bonds and think I need to move this perhaps to a money market fund in order to keep it as safe as possible, my wife and I are so afraid."
Well, Richard, I've got good news for you. If the government bonds you're invested in right now are Treasuries, that's debt to federal government. That's Uncle Sam's money you'll get that back. You have nothing to worry about. That's the safest investment you can possibly have, even money markets are not as safe as investing in the federal government. You know that's an unusual question, usually it's the flipside.
CHETRY: Right.
WILLIS: It's usually I'm in stocks so what do I do. So it's good news to know that somebody out there is parked in a place that's going to protect their money.
CHETRY: Sounds good. I know you have a lot of people e-mailing, Gerri. So -
WILLIS: Will answer as many as we can.
CHETRY: Thank you.
WILLIS: Be sure to e-mail us. Cnn.com/am to let us know what's on your mind. We want to answer those questions.
CHETRY: Thanks, Gerri.
WILLIS: My pleasure.
(BEGIN VIDEOTAPE)
ROBERTS (voice-over): Obama's health.
OBAMA: Nicorette. You want one?
ROBERTS: Has the senator completely kicked his cigarette issue? Dr. Sanjay Gupta looks at the health issue we don't hear much about.
UNIDENTIFIED MALE: It never leaves him. ROBERTS: You're watching "the most news in the morning."
(COMMERCIAL BREAK)
ROBERTS: 43 minutes after the hour. There's been an awful lot of talk about John McCain's health. But what about Barack Obama's? He's a long time smoker and has a history of cancer in his family. Our Dr. Sanjay Gupta is here to tell us more about the health of the other man who could be president. He is in Atlanta this morning. Exactly what do we know about Senator Obama's health, Sanjay?
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, I tell you one of the things that you just mentioned about him, officially quitting smoking. We now know that he's bummed a few cigarettes during the campaign, a few times since he officially quit.
You know as a reporter, John, it's been sort of very interesting to cover this. On one hand you got 1,100 plus pages from Senator McCain. We got one page regarding health records from Senator Obama's campaign. What do we really know about him and what right do we have to know as well about both of these men. Take a look.
(BEGIN VIDEOTAPE)
GUPTA (voice-over): At age 47 Barack Obama is one of the youngest nominees of a major party ever.
OBAMA: I'm wary.
GUPTA: His health isn't as widely discussed as his 72-year-old opponents. But Obama does have one issue that's been talked about. And he was a long time smoker. Boston doctor Thomas Perls has studied the effects of smoking.
DR. THOMAS PERLS, BOSTON MEDICAL CENTER: There's no doubt that smoking is an age accelerator. It enhances vascular disease. It predisposes to cancer. It predisposes to Alzheimer's disease.
GUPTA: Obama said he gave up smoking last year to run for president. He's admitted to falling off the wagon a number of times.
UNIDENTIFIED MALE: How did you quit?
OBAMA: Nicorette. You want one? Try one out.
GUPTA: Dr. Ted Mitchell runs the Cooper Clinic where President Bush got his physicals while governor of Texas. While the risk does get better every single year tat goes by that he's not smoked it never leaves him.
GUPTA: Experts say quitting is no magic bullet. But it does cut the risk of heart disease in half after just a year. After ten years, your lung cancer risk is also cut in half. Senator Obama has cancer in his family. His mother died of ovarian cancer at 52. His grandfather was 73 when he succumbed to prostate cancer. But cancer specialists say neither of those should affect Obama's risk. Observers say we don't know everything about Obama's health because the campaign hasn't released complete medical records. But in May they did release a one page summary of those records and this statement from his long time doctor.
Here's what it said. "Senator Obama has been in excellent health. He's been seen regularly for medical checkups and various minor problems such as upper respiratory infections, skin rashes and minor injuries." The summary went on to say that his cholesterol was good. Blood pressure healthy.
John McCain this year gave reporters including me a glimpse at more than 1,100 pages of medical records. A McCain spokesman tells CNN it's a "complete double standard." The Obama campaign tells CNN no record will be made public.
(END VIDEOTAPE)
GUPTA: So we did ask those two questions, are there going to be any more records made public. They say no. We also asked if they health - they thought health was a legitimate concern for Senator McCain and they simply wouldn't comment on that. So that's about all we know for the time being, at least, John, with regard to his health.
ROBERTS: So what do you make of all of this? What should be the take away here?
GUPTA: Part of it is he's a young guy. And he's 47 years old. And if you look at most health records for someone his age, it's got to be the cholesterol check, which we know his is 173. You know his HDL is 68. If people pay attention, these are good numbers. So there may just not be a lot more there. And people don't want to release anything else. You know, so, I think, part of it just may be what is it.
ROBERTS: And a good way to finally put the cigarettes away is he has to realize how embarrassing it is for the leader to be smoking OPCs. Bad for him.
GUPTA: Absolutely. Funny, in that same interview we talked about sort of falling off the wagon a few times. He did mention, he had to cut himself some slack. He was running for president. He's pretty busy. That was his excuse.
ROBERTS: Yes. All right. Sanjay, thanks. For those of you at home who don't know OPCs, other people's cigarettes. And a reminder, don't miss CNN's special investigation unit presentation, "Fit to Lead, the challenges of the president as a patient." Hosted by our Dr. Sanjay Gupta this Saturday and Sunday at 8:00 and 11:00 p.m. Eastern. 47 1/2 minutes after the hour.
(BEGIN VIDEOTAPE)
ROBERTS (voice-over): Taxicab politics.
ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Taxi?
ROBERTS: Zain Verjee takes the pulse of D.C. and goes for a ride with the United Nations of political pundits.
UNIDENTIFIED MALE: We're the little guys are the ones suffering right now.
ROBERTS: You're watching "the most news in the morning."
(END VIDEOTAPE)
(COMMERCIAL BREAK)
CHETRY: Well, you know where to find the best political team on television. It's right here. But what about the best political team on wheels. Our Zain Verjee took to the streets once again to take the pulse of the taxi cab pundits. I bet you in D.C., you hear a lot of interesting and probably some pretty spot honest estimates of the political season.
VERJEE: Good morning, Kiran. Yes, it's pretty interesting. You know D.C. cabbies are really plugged into what's going down in this town. But it isn't just politics, Kiran. We can settle into the cab and strike up a lot of different conversations about a lot of different topics. Here's what they had to say.
(BEGIN VIDEOTAPE)
VERJEE: Taxi! Taxi! We jumped back into the United Nations of political pundits.
UNIDENTIFIED MALE: I'm from Sierra Leone.
UNIDENTIFIED MALE: I'm from Iran.
UNIDENTIFIED MALE: I came from Afghanistan, Kabul.
UNIDENTIFIED MALE: I was born in Greenville, North Carolina.
VERJEE: It's a quick spin past landmarks of the financial crisis, the White House to the Federal Reserve to the U.S. Treasury. People who work here dreamed up the financial rescue plan. Cabbies know that this is where the power lies.
UNIDENTIFIED MALE: We're the little guys, are the ones suffering right now.
VERJEE: What are the issues about the economy right now that really affect you and that you want the new president to deal with?
UNIDENTIFIED MALE: Now my whole equity line had been cut off. And right now, I'm struggling to pay my mortgage. And I would like them to say more, to talk more about the mortgage crisis.
UNIDENTIFIED MALE: I don't want to be unemployed.
VERJEE: So the cabbies, it's what they tune in, who they pick up, what they see.
UNIDENTIFIED MALE: You see this hotel, no business. Everywhere, there's no business.
VERJEE: He lost his home and his car dealership, so it's back behind the wheel. It's not just people taxi drivers take around town, but they move ideas, too.
UNIDENTIFIED MALE: Health care, where a lot of people are losing their jobs, are going to be out of work. And I don't know. It seemed to me that everything is really upside-down.
VERJEE: Also on the taxi radar, the debates.
UNIDENTIFIED MALE: Since Governor Palin came in, it's really been interesting.
UNIDENTIFIED MALE: Her answers are more precise.
VERJEE: So you're one of the political pundits of Washington, D.C.?
UNIDENTIFIED MALE: I think so.
UNIDENTIFIED MALE: Well it's been going on a long time. But it's going to be exciting to see how it ends.
VERJEE: Thank you.
UNIDENTIFIED MALE: You're welcome.
VERJEE: Bye-be.
UNIDENTIFIED MALE: Thank you, now. Bye-bye.
(END VIDEOTAPE)
VERJEE: Around here, Kiran, it's harder to find a McCain supporter behind the wheel than it is to find a cab in rush hour in the rain. But all of them are agreed on one thing, Kiran. They agree that there's still many twists and turns that could happen in the next four weeks. Kiran.
CHETRY: When you say it's hard to find a McCain supporter, is it simply the GOP brand that's taking a hit there or is it McCain himself?
VERJEE: It's essentially the cab drivers are mostly pro-Obama. Every single cab driver we took, ten out of ten said they were pro- Obama. So we just want to make sure that this is a particular section of Washington, D.C. that's saying that they're pro Obama and it doesn't mean there aren't McCain supporters behind the wheel. It just means they have questions about what McCain is trying to do and that they want Obama in.
CHETRY: Wow. All right. Zain Verjee, some interesting points of view for sure. Thanks for being with us.
(BEGIN VIDEOTAPE)
CHETRY (voice-over): Worldwide economic free-fall. Could it really happen?
HENRY PAULSON, U.S. TREASURY SECRETARY: With the new Treasury authorities, some financial institutions will fail.
CHETRY: And how much of your money is at stake?
Plus, the clock is ticking on these campaigns. Time to get out the wives.
CINDY MCCAIN, WIFE OF SEN. JOHN MCCAIN: The day that Senator Obama decided to cast the vote to not fund my son when he was serving.
CHETRY: Cindy McCain -
MCCAIN: - sent a cold chill through my body.
CHETRY: Michelle Obama.
MICHELLE OBAMA, WIFE OF SEN. BARACK OBAMA: This race just isn't just about me and Barack.
CHETRY: The candidates' wives. You're watching the most news in the morning.
(COMMERCIAL BREAK)
ROBERTS: 55 minutes after the hour. Welcome back to the most news in the morning. Governor Sarah Palin says there is no single fix for dealing with the country's energy demand. Speaking on Fox News, Palin said the country needs to get out of its spoiled by oil mentality.
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: It has to be an all of the above approach to dealing with the energy crisis that we are in. It's got to be the alternative sources of energy, getting plugged into the solution here. Certainly the domestic supplies of conventional source is also being tapped into.
And then we've got to remind Americans that an effort has got to be even greater today towards conservation because these finite resources that we're dealing with obviously, you know, once the oil is gone, it's gone. Once the gas is gone, it's gone. I think our nation has really become kind of spoiled in that arena.
(END VIDEO CLIP)
CHETRY: And that was Governor Palin speaking with Sean Hannity.
Meantime, Senator John McCain's wife Cindy is lashing out at her husband's democratic rival Barack Obama, specifically on his vote against troop funding. Here's what Cindy McCain said in a rally in Bethlehem, Pennsylvania.
(BEGIN VIDEO CLIP)
CINDY MCCAIN: My son like so many others and today like the Palin son, have served on the front lines helping keep peace and helping freedom for other people. But I'm a blue star mom just like Governor Palin is. I'm proud of my son. But let me tell you, the day that Senator Obama decided to cast a vote to not fund my son when he was serving sent a cold chill through my body. Let me tell you, I would suggest that Senator Obama change shoes with me for just one day.
(END VIDEO CLIP)
ROBERTS: Cindy McCain taking it up a notch yesterday in Bethlehem, Pennsylvania, on the campaign trail.
The world market is on a roller coaster ride. What role does our government have in the global financial crisis. Joining me now from Sussex, New Jersey is CNN's Lou Dobbs, host of "LOU DOBBS TONIGHT" and author of the book "Independents Day." Lou, what do you make of this latest news? The Treasury plans to try to recapitalize banks by taking a partial ownership share in them. It's all the news today. Is that something that could restore confidence in the markets?
LOU DOBBS, HOST "THE LOU DOBBS SHOW": Actually this was broken on our show just two days ago by Louise Schiavone. It is a great idea. It is exactly what Bill Isaac, the former chairman of the Federal Deposit Insurance Corporation, Dr. Pat Cho, a number of other economists have suggested. And it's time for this group at the Treasury to start making sense.
ROBERTS: Right.
DOBBS: And it's certainly a sensible and responsible move.
ROBERTS: So does that mean, Lou, does that they're not all a bunch of dunderheads (ph) who don't know what they're doing?
DOBBS: No, well if you're suggesting, am I pleased with them now? The answer is no because we're looking at a trillion dollars in tax for your money that is being put down a rat hole. Adding $38 billion to the loan to AIG, Hank Paulson bailing out his buddies on Wall Street. This is unconscionable, John. And the national media is absolutely derelict in reporting what is happening here.
ROBERTS: Lou, do we have any idea where that money to AIG went, who got paid off?
DOBBS: Yes. Talked about liquidity. Translate that, that's cash. They are spending that money to meet their debt obligations. And that's what they're doing. And they blew through $61 billion in about 10 days. Now it will be $123 billion over the course of three weeks. ROBERTS: But in terms of meeting those debt obligations, do we have any idea who are the first people whose obligations got met?
DOBBS: No, we don't. But I will hazard a guess. A lot of folks on Wall Street and I bet some of them are at Goldman Sachs.
ROBERTS: Right. Nancy Pelosi also, considering another stimulus bill. This one in the neighborhood of $151 billion. A little smaller than the last one, $168 billion which didn't seem to work too well. Is another stimulus package particularly that big something that's need?
DOBBS: How much stimulus can we stand, is really the question here. A trillion dollars. The Federal Reserve has put about - will have put about $900 billion into the banking system. Now we're approaching $2 trillion, combined with a previous stimulus package, this would then amount to $300 billion.
But the good news, John, that's only about the same amount of money as they added in pork to pass the bailout. So maybe they're going to try to be somewhat constrained. I think it is probably a good number. It's one that we should reserve though, because we are going to have people who need that in unemployment benefits and I'm afraid, over the next several months.
ROBERTS: You know, Lou, another idea that you do seem to like is John McCain's suggestion during the debate, that we should spend $300 billion to bail out some mortgage holders.
DOBBS: Right. Right.
ROBERTS: This is something that you suggested a while ago. But, the "Wall Street Journal" says it could reward investors, predatory lenders and undeserving homeowners. There are rules here. But, can we be guaranteed that those rules are going to be put in force?
DOBBS: Yes. Isn't it amazing that if you start talking about the people who actually make this country work, our middle class, our working men and women. Helping them is a really bad idea and almost impossible task. But, if you want to unwind $50 trillion in credit default swaps for crying out loud, that's no problem. Just put a 35 year-old on the case and it's a done deal.
Here's the deal. The fact is, that we should be -- if we're going to apply an economic (INAUDIBLE), let's do triple up for a change. Working men and women who have equity in their homes who are upside down in those homes, owing more than those homes are worth, I think is exactly the right idea. We can administer a program that is rational, that is fair, does not reward those buying second homes, or those who are sitting there with zero equity.
But, this is an important measure to take. And by the way, it's provided for in the bailout legislation itself. But of course, that would be $300 billion that couldn't go to Hank Paulson's buddies on Wall Street.
ROBERTS: Lou Dobbs for us, this morning. Lou, it's always good to sit down with you. We'll see you tonight at 7:00.
DOBBS: Look forward to it, John. I'm glad you got some rest.
ROBERTS: All right, thanks.
CHETRY: See, I didn't know you got any rest. I thought you were just motoring through to the weekend.
