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American Morning
Government Unveils Rescue Plan for Citigroup; Economy Suffering in a Power Vacuum; Race Relations in America; Eyewitnesses Claim to Have Seen UFOs
Aired November 24, 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: Coming up on 7:00 here in New York. A look at the top stories this morning. New numbers outranking America's most dangerous cities. Number one, still fighting back years after Hurricane Katrina, crime-plagued New Orleans. Other major cities topping the list, Detroit, St. Louis and Oakland, California. The safest city, Ramapo, New York, about 40 miles northwest of Manhattan.
Well, pop singer Michael Jackson settled his $7 million lawsuit out of court and will not be giving evidence in a London high court today as scheduled. Jackson was sued by the prince of Bahrain who says that he paid Jackson for a book and album deal. Jackson maintained that the money was a gift.
Well after last night's American Music Awards, hip hop artist Chris Brown has a lot to sing about with three wins during his acceptance speech for Artist of the Year. He was pretty much at a loss for words. Kanye West, Alicia Keys and Rihanna were all two- trophy winners.
And we return to breaking financial news this morning, Citigroup on the brink of collapse getting a $20 billion bailout from the government. Late last night, Citi joined the ranks of banks thrown a lifeline. And in addition to the cash, the government is actually going to be agreeing to back up or guarantee $306 billion in risky loans and securities on their books.
Our Allan Chernoff is live outside of Citi's world headquarters. Now, Allan, just last week, of course, the news that Citigroup was laying off some 50,000 workers. Explain more about why they're having a tough time riding out this storm.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Yes, and it really is still a storm over here at Citigroup in spite of this morning's news. The problem at Citi are all of the real estate loans that the bank either made or bought from other banks more than $300 billion worth, and a lot of those loans have gone bad. So the government is making a deal here.
They're saying to Citi, look, we will backstop you. We will take care of the bulk of the losses on those loans, and we're going to give you another $20 billion. That's on top of the $25 billion Citi has already taken from the buyout fund. That means that this institution is basically taking about one out of every $5 of the bailout money that has been approved by the Congress. So that's big, big bucks the government's putting in to Citi. In return, the government is getting stock that will pay a dividend eight percent, so it's getting a big stake in the company, and it's also hoping to essentially stabilize not only Citi, but also the entire financial system.
This baby cannot go down. That's essentially what Washington is saying. We've got to make sure that Citigroup is stabilized. So that's -- that's the bottom line here.
CHETRY: All right. Allan Chernoff for us outside of the bank today, thank you so much.
Christine Romans also "Minding Your Business." She joins us now. And a big question a lot of people are asking today is, how did this happen?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: How does it happen that Citibank went from a respected banking giant to now a victim or recipient of colossal corporate welfare, the kind of corporate welfare that we have never seen before? How did that happen?
It's hard to make it simple and that's what I think really perplexes people, in trying to understand how did this happen? This happened because there were people in this company who were making a fortune packaging up mortgage and real estate-related securities, packaging them up and putting them into these tradable securities and trading them all over the world with other banks.
You heard Allan sort of explaining it there, and they made a fortune at it when house prices were going up. And they were hungry for it. And there was this feeling -- you talk to real estate agents who said, we're told, we need more mortgages.
The banks need more mortgages. We got to have more mortgages because they were packaging these things up and they were in a tradable security, like a stock or a bond, you know, a tradable security and then suddenly they started to go south. When housing prices weren't going up anymore, they started to turn south and none of these banks really had an idea of just how pervasive these investments were and they started to completely unravel and they were literally toxic on these books.
Now the treasury secretary originally said that we were going to buy back these toxic assets from the banks. We're going to spend all of this money in the Troubled Asset Relief Program and buy them back. When they switched gears and said we were just going to be investing money into capital into the banks, that's when Citi really started to go down, because they had a lot of these bad assets and Wall Street was expecting them to be taken off the books.
So now, we're going to step in as taxpayers and we're going to get an eight percent yield on $27 billion in stock and we're going to backstop $300 billion of losses. It's a mammoth, mammoth, mammoth lifeline to this company. And I just want to make a quick, quick addendum here that, you know, the treasury secretary last week was widely quoted, I heard him say myself that it was most likely that a lot of this money, the second half of the bailout was going to be left over for the next administration. He could still step in with his own new programs. He could still step in and ask for the rest of the $350 billion if, if, God forbid, things get really ugly here in the next few weeks -- Kiran, Joe.
JOE JOHNS, CNN CO-ANCHOR: Well, let's hope they don't. Thanks so much, Christine.
JOHNS: Barack Obama's transition team is finally breaking its silence on the economy. Today, he's expected to unveil his economic team tapping New York Fed Chief Timothy Geithner as treasury secretary. Larry Summers, who ran treasury for the last 18 months of the Clinton administration, will be Obama's chief economic adviser. The president-elect's senior adviser taking away some of the mystery yesterday.
(BEGIN VIDEO CLIP)
DAVID AXELROD, OBAMA SENIOR ADVISER: We need the best people we can find, the best minds in our country to help us accomplish that plan. And people like Tim Geithner and Larry Summers are among those people.
(END VIDEO CLIP)
JOHNS: Along with the team, we expect Obama to announce a massive economic recovery plan today. Our Suzanne Malveaux is tracking the story for us in Washington this morning.
Suzanne, have you heard any details about that plan so far?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Joe, as you know, it really is a big, big mess that they have to deal with, but Barack Obama is certainly turning to his new economic team to help him shape what is becoming a huge stimulus package. And this weekend, he said that he hopes that they're going to sign something. It's a two-year economic package. He wants to sign it very soon after taking office, and what would be included?
Well, the stimulus plan includes money to help create, he says, 2.5 million new jobs in the next two years, have the government invest in things like modernizing the country's bridges, the schools, plans to invest in alternative energy, wind, solar, things like that to try to help create those jobs but obviously, Joe, a very, very big problem with this economic crisis. Barack Obama at least trying to reassure the American people that he has some sort of plan.
JOHNS: And we're obviously still tracking all the cabinet appointments, who is going to go where in all likelihood. Have you heard anything about New Mexico Governor Bill Richardson as secretary of commerce? Any more on Hillary Clinton? That's the thing everybody is watching, the secretary of state. MALVEAUX: Yes. Everybody's watching that. Well, we certainly -- we expect him to name Richardson secretary of commerce. Richardson, of course, brings a lot of state-level experience to the table. In his current job, he already dealt with some of those issues that Obama is talking about.
As the governor of New Mexico, he took state money. He invested in a variety of industries like solar company, a startup aviation company, really a way to boost those local businesses and create some jobs.
Now as for Hillary Clinton, two sources close to her have told me they fully expect her to accept the position of secretary of state. Other sources have told CNN that Obama is on track to nominate Clinton as his secretary of state and that could happen, of course, Joe, after the thanksgiving holiday. So, right around the corner.
JOHNS: That's for sure. Suzanne Malveaux in Washington, thanks so much.
CHETRY: Well, the presidential power vacuum, one is on his way out, the other is on his way in. But in this worldwide financial crisis, should somebody step up now? We're going to see who's calling for the inauguration date to get moved up to get Barack Obama into office faster.
Eight minutes after the hour.
In search of aliens.
(BEGIN VIDEO CLIP)
MILES O'BRIEN, CNN SPACE CORRESPONDENT: And it takes off like you're just standing still.
MILTON TORRES, FORMER AIR FORCE PILOT: Like I wasn't even there. Like I wasn't even there. Just gone.
(END VIDEO CLIP)
CHETRY: Miles O'Brien talks to an astronaut, a governor, and a former president. Credible eyewitnesses who all swear they've seen a UFO.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Well, just under two months now until Barack Obama's inauguration but with a lame-duck president still in the White House, Wall Street on a roller-coaster ride. A lot of Americans are just trying to stay afloat, and can we afford to wait?
Our Jim Acosta is looking into that from Washington for us this morning. You know, a lot of people are concerned two months seems like a long time when you look at all of the huge heavy issues we're confronting. So what's the solution?
JIM ACOSTA, CNN CORRESPONDENT: Well, Kiran, there is a term for this interim period, it's called an interregnum. And historically, presidents during this interregnums try to avoid making any waves. But the problem with that is that a lot can happen between now and January 20th when Barack Obama is sworn into office. Some economists wonder if the country can wait that long.
(BEGIN VIDEOTAPE)
ACOSTA (voice-over): It's an American transition tradition. The president-elect bides his time and puts together his cabinet while the current commander in chief winds down, bidding the world farewell. But there are growing fears this tradition has left the nation in a power vacuum, exposed to an economic crisis without clear leadership.
(BEGIN VIDEO CLIP, CBS'S "FACE THE NATION")
BOB SCHIEFFER, CBS ANCHOR: It's the interim period. How would you describe this period? Some economists say we're in a pretty dangerous time here right now.
AUSTAN GOOLSBEE, OBAMA ECONOMIC ADVISER: I think it is a dangerous time. It's hard to deny that.
(END VIDEO CLIP)
ACOSTA: One Obama economic adviser says the incoming president has urged the current president to do more to fix the economy.
AUSTAN GOOLSBEE, OBAMA ECONOMIC ADVISER: We have repeatedly called on the administration to do things like a stimulus, but the president did not appear to be interested in doing that.
ACOSTA: Mr. Obama has kept a low profile in transition maintaining there's only one president at a time. But some Democrats say this is no time for the future president to stay on the sideline.
SEN. CARL LEVIN (D), MICHIGAN: I would like him to become, at least offer to become more involved. And I think that offer would be welcomed not just by the Democrats in the House and the Senate, but also by the White House itself.
ACOSTA: One idea is to change the constitution, and swear in Mr. Obama as soon as possible.
THOMAS FRIEDMAN, N.Y. TIMES COLUMNIST: I think we should seriously consider moving up the inauguration date, because I don't know that we have two months to have a political vacuum at this moment, in this economic crisis.
ACOSTA: Former Secretary of State James Baker is proposing a historic face-to-face meeting between both men to generate ideas to stabilize the markets.
JAMES BAKER, FMR. SECRETARY OF STATE: I think just the mere fact of their sitting down together and seeing if there's not one thing that they could come together on would do a lot to restore confidence and remove the anxiety and fear that's out there.
(END VIDEOTAPE)
ACOSTA: But there may not be much hope for any dual presidential initiatives. As one adviser to the Obama transition team put it, the next two months are an opportunity to put together a team and a plan. So, Kiran, no co-presidencies in this country, no matter how bad things get.
CHETRY: No, I hear you. No co-presidencies but it is interesting that the current New York Fed chief is actually going to be the incoming treasury secretary and they're sort of doing all this work on this big bailout for Citi. So there is some working together, if you will.
ACOSTA: A little bit of overlapping, yes.
CHETRY: All right.
ACOSTA: Probably not a bad thing.
CHETRY: Yes, exactly. Not in these tough times.
Jim, great to see you this morning, thanks.
ACOSTA: You bet.
CHETRY: Joe?
JOHNS: Many see Barack Obama's history-making win as a pivotal moment in this country's racial relations. But are we expecting too much too soon? An American race relations reality check.
And from an astronaut to a former president, credible people who claim they've seen things that can't be explained away. Encounters with UFOs, our special series, "In Search of Aliens" begins.
It is fourteen minutes after the hour.
(COMMERCIAL BREAK)
JOHNS: Welcome back to the "Most Politics in the Morning." Race was a hot topic during the election and that isn't likely to change as America gets ready to swear in the first black president. In fact since Election Day, dozens of towns across America have seen sharp upticks in racist crimes, hangings of nooses, graffiti, even death threats plus evidence that the KKK is adding to its numbers after years of obscurity. And our ongoing look at issues likely to land on Barack Obama's desk, Jason Carroll has today's "Memo to the President."
(BEGIN VIDEOTAPE)
SEN. BARACK OBAMA (D), PRESIDENT-ELECT: Out of many, we are one. PROF. SAMUEL ROBERTS, COLUMBIA UNIVERSITY HISTORY DEPT.: He has spoken very forcefully and eloquently about where he thinks race relations are today, but that was not necessarily a platform of his campaign.
JASON CARROLL, CNN CORRESPONDENT (voice-over): True, it was not but Mr. President-elect many see your historic election as a watershed moment in race relations. A recent CNN poll shows 77 percent of people believe the country's racial problems will improve under your administration. But others say expectations have been set too high.
LYNETTE CLEMETSON, MANAGING EDITOR, THE ROOT: The American people hired Barack Obama to be president of the United States, not chief magician of the United States, and he cannot fix everything.
CARROLL: Here are the facts, Mr. President. Since your election, several highly publicized incidents of hate crimes against immigrants and African-Americans, a glaring reminder not everyone is ready to live in a post racial society. Just as glaring, the gaps between minorities and whites in health care, income and education.
MARIA TERESA PETERSEN, EXECUTIVE DIRECTOR, VOTO LATINO: The number one thing for parents for youth in the Latino community and the African-American community is how do we close this education gap. And I think if you were to come out with a mandate and say, look, this is one of my priorities, then we're on to something.
CARROLL: The chances of a black or Hispanic elementary student attending school in a high poverty area, about 48 percent against five percent for a white student. Government figures from 2007 say the median income for black families was $34,000, Hispanics nearly $39,000, and for white households, nearly $54,000. In terms of health care, Hispanics are more than twice as likely to be uninsured than non-Hispanics.
ROBERTS: It's quite apparent that the system we have is broken. It's not workable in many senses. There's far too many people who are not covered with decent health coverage.
CARROLL: It doesn't take an expert to figure out that better health care and education are a broad social benefit, regardless of race. So Mr. President, if you really make strides in these areas, you'll help all Americans, but maybe some, more than others.
CLEMETSON: Understand that if you address all Americans, and if you address all walks of life in all areas where Americans are hurting, then you end up dealing with issues of race.
(END VIDEOTAPE)
CARROLL: This country has come a long way in terms of dealing with race relations. Even so, some question if racism can ever be eliminated from society. Obama may not be able to change the way we think about each other or treat each other, but adopting policies that make life better for all people may be one way of solving the problem. I'm optimistic, for one. JOHNS: He has just so many things on his plate, doesn't he?
CARROLL: A lot of pressure.
JOHNS: For sure, thanks, Jason.
And tomorrow in our "Memo to the President" series, Jason will be back to look at the challenge the president-elect faces with America's crumbling education system.
And we want to hear from you. Send us your own "Memo to the President." Just go to CNN.com/am and click on the iReport link. Speak up, give the president-elect a piece of your mind.
CHETRY: Meanwhile the latest on this massive Citigroup rescue plan. Why this bank, and why now, and what this could mean for the embattled auto industry still begging for a bailout.
It's 22 minutes after the hour.
In search of aliens.
(BEGIN VIDEO CLIP)
FIFE SYMINGTON, FORMER ARIZONA GOVERNOR: Unless the Defense Department proves this otherwise, it was probably some form of an alien spacecraft.
(END VIDEO CLIP)
CHETRY: A former governor, an astronaut, and even a president, all witnesses to UFO sightings?
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: So you believe in this kind of things?
UNIDENTIFIED MALE: Let's just say I want to believe.
(END VIDEO CLIP)
CHETRY: Even the music gives you goose bumps. Why does this fascinate us so? Well, it does from "Star Wars" to "Star Trek" the "X Files," even "South Park" and the latest "Indiana Jones," our culture is obsessed with the idea of aliens. And you could range from just a bit curious to being a fanatic, scouring the skies, hitting the blogosphere.
Well, just for you, all this week we're bringing a special series "In Search of Aliens." And for today, UFOs aren't just for Hollywood and science fiction novels, even though you may think that only conspiracy theorists and cooks believe. Both Congressman Dennis Kucinich, for example, as well as former President Jimmy Carter say that they have seen something in the skies. And our space correspondent Miles O'Brien found some other believable believers as well.
MILES O'BRIEN, CNN SPACE CORRESPONDENT: Well, Kiran, you can count me among them. I myself saw a UFO years ago. I'll tell you a little bit more about that later. Don't know what it was, where it came from. Sure seemed odd and a lot of otherwise not so odd witnesses can tell you a similar story.
(BEGIN VIDEOTAPE)
MILTON TORRES, FORMER AIR FORCE PILOT: It's one of the better flying airplanes.
O'BRIEN (voice-over): Milton Torres is not the kind of guy to tell a tall tale. Twenty years in the Air Force, an engineer with a Ph.D., a professor, he's all about brass tacks and left-brain thinking. So I was all ears when he started talking about his UFO encounter over England in May of 1957.
TORRES: I got scrambled one night, and my first orders are, you will be ordered to fire on this mission.
O'BRIEN: In just a few minutes, he was over the North Sea in a fighter like this at 31,000 feet traveling nearly the speed of sound. In the dark and in the clouds, Milton saw the strongest signal he had ever seen on his radar screen.
TORRES: It was (EXPLETIVE DELETED) the target was there, and the target looked like an aircraft carrier. It was that big on my screen.
O'BRIEN: He flew toward it to try and shoot it down.
(on camera): And it takes off like you're just standing still.
TORRES: Like I wasn't even there. Like I wasn't even there. Just gone.
O'BRIEN (voice-over): Milton has no earthly explanation for what he saw.
(on camera): Could it have been a problem with the radar? Could it have been a weather phenomenon?
TORRES: No.
O'BRIEN: Could it have been a meteor, any of those things?
TORRES: Everything was explained to me already.
O'BRIEN: Yes?
TORRES: I knew what it was. It was some design of an aircraft by some space alien. O'BRIEN (voice-over): Milton Torres says a U.S. intelligence agent ordered him to keep his mouth shut. The odd encounter is one of hundreds of once classified UFO sightings released last month by the British government. It's the sort of disclosure UFO investigators are demanding from the U.S. government.
How would people react?
EDGAR MITCHELL, APOLLO 14 ASTRONAUT: It would be kind of boy (ph), "it's about time.
O'BRIEN: Former astronaut Edgar Mitchell is the sixth man to walk on the moon and a firm believer that aliens have visited our planet repeatedly. So I had to ask, why are they coming in this little glancing visits and we haven't had a more meaningful dialogue or contact or attempt to communicate?
MITCHELL: Well, I think we have.
O'BRIEN: Really?
MITCHELL: I think we have, but this is not common knowledge.
O'BRIEN: Mitchell told me after he returned to the moon, he was briefed at the Pentagon by a high-ranking officer whose name he would not reveal, who said the U.S. government does have evidence of alien spacecraft and is keeping it a secret.
MITCHELL: I think the real reason to still keep it a secret is power and control, controlling whatever technology exists.
O'BRIEN: All of this is fascinating stuff, if it is true. But consider this, there are thousands of sightings of odd, unidentified flying objects reported every year the world over, and yet, no one has produced smoking gun proof of any visits from another planet. So isn't it more likely they are some sort of natural phenomena or maybe secret military aircraft or just plain old hoaxes?
Maybe, but consider this one. March of 1997, a huge V-shaped craft appears to fly over Phoenix. Among the witnesses, then governor and seasoned pilot Fife Symington.
FIFE SYMINGTON, FORMER ARIZONA GOVERNOR: And I suspect that unless the Defense Department proves this otherwise, that it was probably some form of an alien spacecraft.
O'BRIEN: Or consider this one, before he became president, even Jimmy Carter saw something strange in the sky over Plains, Georgia.
JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: I and about 25 others saw something in the air that changed colors and was round and came and left.
O'BRIEN: Carter doubts what he saw was an alien craft, but most Americans need no convincing. Maybe it comes from movies like "Close Encounters" or maybe art is imitating extraterrestrial life. (on camera): For those who are skeptical of you, what do you say? Do you say, open your mind?
TORRES: Be skeptical. Skeptical as you want but by all, don't close your mind.
(END VIDEOTAPE)
O'BRIEN: Who knows, maybe we will soon get the full story. Among the people fascinated by the notion of aliens and UFOs, the man in charge of Obama's transition team, John Podesta. In a speech at the National Press Club a few years ago and we're quoting him now "it is time to open the books on questions that have remained in the dark on the question of government investigations of UFOs. It is time to find out what the truth is, that's really out there." He said it's not just the right thing to do, Kiran, he said it's the law. So we'll see.
CHETRY: All right. Tell us about your own UFO sightings. We know that you're a pilot.
O'BRIEN: It was about 20 years ago, my wife and I were in Maine. It was dusk, we looked up in the sky, we saw a very bright light. It looked like a planet and then it took a 90-degree turn and took off at impossible speeds. What was it? Was it a meteor? Was it a black project airplane? Or was it something else? I don't know.
CHETRY: What were you guys celebrating at the time?
O'BRIEN: We were completely sober. Completely sober.
CHETRY: I know. I mean there's a lot of people just like you that actually say very similar things which is why as John Podesta said, let's throw open the books and check it out.
O'BRIEN:: If nothing else, let's see what's in the files.
CHETRY: I told you I want to see what's over your shoulder the guy with the triangular face and the big eyes.
O'BRIEN: That would show you. All right.
CHETRY: That would do finally do it for me. Meanwhile it is fascinating, Miles. And tomorrow actually we're going to take look at a famous spot in UFO history, of course, Roswell, New Mexico.
It's been 61 years since something happened there. Is it still a mystery or is it case closed for Roswell? Miles is going to be back tomorrow with more here on AMERICAN MORNING, and meanwhile, we're also asking others to send in their videos, maybe their pictures, if you've seen something funny in the sky or you're convinced that aliens exist or you just think it's science fiction?
We want to hear from you. Send us any pictures, video at CNN.com/am. You can just go to our web site and click on the i-report link. We look forward to tomorrow as well, Miles. Thanks so much. O'BRIEN: All right. See you then.
JOE JOHNS, CNN ANCHOR: Kiran, it's 31 minutes past the hour. Here are this morning's top stories. Some optimism from Asian investors overnight as the price of oil hit 50 bucks a barrel. The price continues to hover around that mark on the news that Barack Obama will unveil his economic team and recovery plans today in Chicago.
And who will be on Obama's team? The Treasury secretary spot will be going to New York Fed chief Timothy Geithner. Larry Summers, who ran treasury for the last year and a half of President Clinton's administration will be Obama's chief economic adviser, and New Mexico Governor Bill Richardson heading up the Commerce Department.
Chart-topping couple Beyonce and Jay-Z topped this year's "Forbes" list of richest celebrity couples with a combined worth of $162 million. Country music couple Faith Hill and Tim McGraw are fourth and Keith Urban and Nicole Kidman ranked eighth.
And so much for high def, are you ready for your football in 3-D? Next week's matchup between the San Diego chargers and the Oakland Raiders will be broadcast live in three dimensions to theaters in L.A., New York and Boston. The NFL says it wants people to see what the future holds.
Today, the focus in the world of politics, all on the economy, as Barack Obama unveils his economic plan. Word of a $20 billion Citigroup bailout and Detroit's car makers are still clamoring for cash. Helping us break it all down, the U.S. managing editor of "the Financial Times" Chrystia Freeland. How are you doing?
CHRYSTIA FREELAND, U.S. MANAGING EDITOR, "THE FINANCIAL TIMES": OK. Busy weekend, though.
JOHNS: Exactly. So I guess our first question really is, is this going to calm the markets, the Citigroup move?
Well, obviously we don't know yet. I mean it was absolutely clear last week that Citi was in a lot of trouble. The share price fell from a low, fell another 60 percent and it looks a lot like what had happened with Bear Stearns and Lehman. The market really sort of focusing on the weakest animal in the pack, that Citi is huge, it's enormous. So there was a lot of pressure on the government to do something to stabilize this massive institution. It is really too big to fail?
JOHNS: Right and so what do you? I mean if it's too big to fail and you have to kick in another what $20 billion. Where do we go from here? I mean is it just going to be more money, more money, more money?
FREELAND: Well you know the really big thing that the government did, which is unprecedented in this crisis so far, is it also guaranteed $306 billion worth of the toxic assets on the Citi balance sheet. That's a lot of assets. Citi has got to take the first $29 billion in losses if there are losses on that portfolio but further losses the government now is essentially insuring those. So I think one of the big questions is, do other institutions now say, hang on a minute. Why does Citi get this monster government guarantee? What about us and does that distort the market?
JOHNS: Right. And there are a bunch of other companies out there or probably will start making the very same claims.
FREELAND: Well, everybody does have toxic debt on their balance sheet. Citi had a lot of it and Citi was being singled out by the market but this is the biggest bailout we've seen of a single bank, the government just focusing on one institution.
JOHNS: You talked about toxic assets. One of the questions I've always had, is at what point does somebody step in and actually start valuating those assets, trying to figure out how much they're really worth, not on paper but how much they're really worth and sort of putting some certainty in, because at the end of the day, isn't that what the market needs most, certainty?
FREELAND: Well, you're absolutely right, that certainly and that lack of certainty is the core of the problem, but the market now has to do that all the time. There's been a not too long ago change in accounting rule called mark-to-market accounting where the banks have to value those assets according to their market price and that is one of the things which has sent the banking institutions in this spiral. Because no one wants to buy them. So it's like your house. If no one wants to buy your house, what is it really worth? Probably a lot less than it would be worth if you sold it two or three years from now.
JOHNS: So now we're getting the name of the Treasury Secretary Geithner, a lot of people on Wall Street know him real well. Is this the right guy? Is he too inside. I know the market shot up when they named him but isn't that again just a sort of reflection of we've got certainty?
FREELAND: I think it's partly certainty but Tim Geithner I think will be an excellent secretary of the Treasury. He is really smart. He is very good with people. He knows what is happening on Wall Street intimately. He served in the Treasury under Bill Clinton so he's really experienced although he's only 47 years old. And I think another important thing is that he and Larry Summers, who's now been named Barack Obama's chief economic adviser, are very close and have a good working relationship, so I think that's a very strong team.
JOHNS: Chrystia, thanks so much for coming in and thanks for adding to the body of knowledge on this.
FREELAND: Pleasure.
CHETRY: Well the expectations couldn't be higher for this president, so what if he stumbles? If history tells us anything, he may, so pay attention, Mr. President. We're looking at some of the big mistake that past presidents that you could learn from.
Also, more and more Americans are cooking and eating at home. And some say we are a nation obsessed with food. So this thanksgiving week, we're feeding that obsession and the host of Bravo's "top chef," Todd () is here.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
PADMA LAKSHMI, HOST "TOP CHEF": There are more people vying for top jobs here than anywhere else in the country. As the saying goes, if you can make it here, you can make it anywhere.
(END VIDEO CLIP)
CHETRY: That was Padma Lakshmi the host of Bravo's "Top Chef" kicking off season five of this show. She is also an award-winning cookbook author. Here's her new book, "Tangy, tart, hot and sweet." There's a lot of great recipes in here. And she joins me from New York with more on the show's popularity and America's growing obsession with food as Thanksgiving closes in. Is it growing or have we always been obsessed with food?
LAKSHMI: I think we've always been obsessed with food. At least I know I have. I think that you know with the advent of all of these food programs on TV, we all are much more interested in the making of it, and you know the world is becoming a bigger and smaller place at the same time. So we're aware of other cultures' foods.
CHETRY: Your show, by the way, "Top Chef" is a huge success. I'm a fan myself.
LAKSHMI: Thank you.
CHETRY: Why is it people love - what is it about the show that draws people in? What do you hear when you're out there?
LAKSHMI: You know I think that because we all eat and we've all eaten all our lives we have very definite opinions about it, even if we're not in the culinary field. And then I just really think it's compelling to watch somebody be really passionate about what they do, whether it's cooking or sewing or anything else and I think that's why we watch. You know, they're really - they're trying to be the best as what they do, and that's really exciting. It's like watching live action sports in a way.
CHETRY: And the nature of being a chef, they're artists. Right?
LAKSHMI: Yes.
CHETRY: So they're temperamental and so that always makes for good TV. But you know and how do you guys decide - I mean there's a lot that goes into the personalities, who you pick. Obviously having these culinary skills is just one aspect.
LAKSHMI: Yes. I mean I really don't get involved in the personality or the interaction between the chefs. Really when I see them, at judge's table or I see them in the kitchen, unless I watch the show right when it's being aired I'm not privy to all that background stuff in the lot. So it's really not about that. You know when you have a bunch of creative people, when they're stuck in that hot house environment, tempers are going to flare, you know, and they are all competing against each other so you know that's where a lot of that tension comes from, and the time limit.
CHETRY: The time limit really kills you sometimes, doesn't? And the other thing, I always feel bad, you give them an assignment and sometimes they don't mean to not listen but they just either do it all the way wrong. How do you deliver that blow which is your food tastes horrible, without crushing their spirit?
LAKSHMI: You know, it's really, really hard, because I have a lot of empathy for what they do. You know I always tell people it's even harder than it looks on TV, and you try and give them constructive criticism, I try not to say well, you know your food is awful. I try to say you need more salt or perhaps if you had done this thing or that ingredient doesn't lend itself to this combination, so you try to be constructive, so that they can learn for the next challenge.
CHETRY: You know in this tough economic time we're in right now, it's hard enough to have a successful restaurant.
LAKSHMI: Yes.
CHETRY: Let alone when people are starting to cut back and one of the things they can cut back on is going to restaurants. How do you make sure your business can stay successful and stay viable? What are some of the key things?
LAKSHMI: You know, I think it's important to offer people different choices, like pre-fixed menus, and you know offer different types of foods that are at different price points and then just make it really enjoyable when they do come in, because that's the thing I noticed, is that now people going out or shopping splurge as something even more luxurious than you want to give them that experience. I think when people go out to eat they're looking for something they can't get at home. And that's what to remember.
CHETRY: I want to ask you about Thanksgiving because we all stress - there's something about Thanksgiving that stresses us our, that's different, you know, in terms of making sure that we prepare everything correctly. What are some tips, what are some ways to just make it easy on us but still have it taste good?
LAKSHMI: I always tell people, you know, plan your menu, and then balance that menu with a lot of items that can be made in advance, and that way, when your guests are there, you're enjoying the time with family and friends, you're not stressing out in the kitchen, so I would say even do like 65 percent of your meal plan ahead of time, start cooking two, three days in advance, even all the things that you need on that day, try and prep those ingredients, chop all the vegetables, have them laid out, be organized, be relaxed. That way you know it's about enjoying the people you love, rather than -
CHETRY: Yes, you are talking about people that are running in to the grocery store the day before, trying to get -
LAKSHMI: Oh, I do, that too. I do that, too, but yes.
CHETRY: And then you call your friends, how do you defrost a frozen turkey in about six hours? Well, you can't.
LAKSHMI: You can't.
CHETRY: Well, the book is great and there's a lot of recipes -
LAKSHMI: Thank you.
CHETRY: I someday want to try in here.
LAKSHMI: There's a great cranberry chutney recipe in there. Actually if you want like is said spicy relish but using a traditional ingredient.
CHETRY: Well, it was wonderful to have you with us. Padma Lakshmi, thanks so much.
LAKSHMI: Thank you, Kiran.
CHETRY: And you can by the way, catch "Top Chef," it's every Wednesday night. It's on Bravo, at 10:00 Eastern and Pacific Time 9:00 Central. Thanks.
(BEGIN VIDEOTAPE)
JOHNS: Presidential pitfall.
FRANK SESNO, CNN CORRESPONDENT: He'd pour over budgets, read legislation all the way through, even review requests to use the White House tennis courts.
JOHNS: Frank Sesno looks at classic White House blunders that the president-elect needs to avoid. You're watching the most news in the morning.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
JOHNS: Top videos right now on cnn.com, most popular, spectators watch in fear as a boat race goes terribly wrong. The boat pilot in a qualifying run of the Napa world finals suddenly sways out of control. Despite covering a quarter-mile in just seconds, the pilot ejects safely from the moving boat.
Also, here's a restaurant that's all about monkey business, monkeys serving up beers in Japan. Tourists from around the world crowd the tavern despite a global economic slowdown. Health inspectors say it's safe as long as the monkeys keep their clothes on.
CHETRY: Do they really -
JOHNS: That's what they say. And finally, do you ever moonwalk in the mirror when no one's watching? These boys in London are putting their practice to work. They're auditioning for the role of a lifetime the chance to play the young king of pop in a new musical. Check out what's most popular now, just go to cnn.com/mostpopular.
CHETRY: There is just so much now to go over with Rob Marciano as we get a look at the weather. First of all, Rob, as long as the monkeys keep their clothes on, you're in the clear.
ROB MARCIANO, CNN, METEOROLOGIST: Why is it I've been on the show twice this morning and both times they've come to me with some form of nakedness? And it's only Monday.
CHETRY: I'm sorry. I'm sorry. I don't know what to say, besides that, you got the weather hit and go try out to play the young Michael Jackson as well if you have time because your moonwalking skills are right on.
MARCIANO: Oh, they're right there. So many things to be thankful for this week. Hey forget about the weather for a sec. I want to show in lieu or not in lieu of but in the spirit of Miles' piece on aliens, let's take a look at some video that came out of Alberta, Canada, this weekend. A meteorite came crashing down, they think it fell and actually hit the ground somewhere in Alberta. It was caught on the dashboard cam of a car, over 400 reports of this, from 10-year-old little girls to cattle farmers across the prairie. This was a biggie. They came into the tail end of the meteor showers that happened early last week.
All right. Back to the weather on the radar scope we are seeing some rainfall from the Great Lakes all the way down to the Gulf of Mexico. Some of this will be moderate to heavy at times. A little bit of light snow across parts of southern Wisconsin. This won't lost all that long. So if it does snow and will in Chicago, later on today. It probably won't stick around too long. All right. Cincinnati back through Lexington, we're looking at some showers, some cold air with six degrees yesterday morning in Syracuse, warming up a little bit in advance of this rain which will eventually push into the northeast come later on tonight. So not a good night to be dancing around naked, be it a monkey or person.
CHETRY: That's right. Especially if someone has got camera phone in view, right? Rob Marciano, thanks.
MARCIANO: You bet.
(BEGIN VIDEOTAPE)
JOHNS: Another giant American bailout. The massive rescue of Citigroup. Why is this bank, why now? Plus, Eliot Spitzer's prostitute speaks. The risks of her going public.
And he challenged his congregation to seven days of sex.
UNIDENTIFIED MALE: Sex comes from god.
A week in review. He's up and talking. You're watching the most news in the morning.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
HENRY FONDA: I presume you all know who I am. I'm plain Abraham Lincoln. I'm in favor of a national bank, of the internal improvement system, and high protective tariff. These are my sentiments and political principles. Selected I shall be thankful.
(END VIDEO CLIP)
JOHNS: That was Henry Fonda in the 1939 classic movie "Young Mr. Lincoln" and with all that's been said about Barack Obama, it's becoming increasingly clear that there are big ideas and huge expectations surrounding this president as well. So, if he stumbles, well obviously, it wouldn't be the first. Frank Sesno joins us from Washington for a look at presidential blunders from the past and what Obama could learn. Good morning, Frank.
FRANK SESNO, CNN CORRESPONDENT: Good morning, Joe. Let me tell you what, you see the Lincoln example there, it's so fascinating because Obama talks about it. The pressure is on this guy and he knows that he's going to have to hit the ground running because of the crisis in the financial markets and the economy and all the rest. He needs to get it right, he needs to get it right fast and he's trying to look ahead by looking back.
(BEGIN VIDEOTAPE)
SESNO (voice-over): Barack Obama, student of presidential history.
SEN. BARACK OBAMA (D), PRESIDENT-ELECT: I've been spending a lot of time reading Lincoln. There's a wisdom there and a humility about his approach to government.
SESNO: Obama might also find it helpful to study recent presidential experience, to avoid mistakes that can hurt a chief executive right out of the gate. Lesson one, don't overreach and don't be naive. That was a big part of young John Kennedy's problem, just three months after he was sworn in with the CIA's disastrous bay of pigs invasion of Cuba. Kennedy took the fall.
Lesson two, know your audience. Bill Clinton learned that the hard way when just a month on the job, he proposed a sweeping new energy tax.
BILL CLINTON, FMR. U.S. PRESIDENT: I recommend that we adopt a BTU tax on the heat content of energy. SESNO: He had a democratic house and senate, but he miscalculated. After four months of lobbying, Clinton withdrew the proposal, politically bruised.
Lesson three, timing matters. Clinton again, this time gays in the military, don't ask, don't tell. It generated an angry controversy early on with the president's adversaries never forget.
Lesson four, people matter, especially here. Ronald Reagan saw that when his national security advisor Richard Allen became radioactive because of a few expensive gifts he accepted. Allen had to resign.
Lesson five, don't micro manage. Jimmy Carter comes to mind in the early days he would pour over budgets, read legislation all the way through and even review requests to use the White House tennis courts, he became known as a myopic micro manager.
Valuable history lessons for Barack Obama because if anything, the world he'll face is more complex and more inclined to rush to judgment.
(END VIDEOTAPE)
SESNO: And Joe, here's another one for all of us to chew on for a while, don't draw lines in the sand if you're going to have to step over them. You know who comes to mind there, George Herbert Walker Bush, read my lips, no new taxes, he said and then raised taxes as a part of a big budget deal. His conservative base never forgave him.
JOHNS: And while you're at it, Frank, taking a look at the George W. Bush administration, is there is any lesson learned there? Is there just one of them or several?
SESNO: Well, I think there are several of them, early on lesson one would be don't think you know what's going to happening because curve balls get thrown in big and sometimes bad ways, 9/11 comes to mind. The other thing is corner of the realm is your credibility and your confidence and in both cases, credibility with weapons of mass destruction, the war in Iraq, competence with Katrina, those things were badly botched and in the end as we see in the approval numbers and a lot of other things, it cost George W. Bush dearly. So a lot to learn and lot to do for Barack Obama here.
JOHNS: Frank Sesno, always love your pieces.
SESNO: Thanks, Joe. Talk to you soon.
JOHNS: Kiran.
