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American Morning

North Korea Plans Launch; Madoff in Court; Money Man Gone Mad; Revitalizing a Rust Town; Dr. Gupta Answers Viewers Medical Questions; John Edwards Gets Questioned About Morality

Aired March 12, 2009 - 08:00   ET


KIRAN CHETRY, CNN ANCHOR: Well, coming up on the top of the hour now here on the Most News in the Morning. We got a lot to cover this hour. And here is a look at what is in our agenda that we're going to be breaking down for you in the next 15 minutes.

You're looking at new pictures now of Bernard Madoff entering the federal courthouse in lower Manhattan. He is expected to plead guilty to 11 felony counts any moment now. He facing a max of 150 years in prison. We're breaking down the developments.

And North Korea reportedly set a time frame to fire what it says is a satellite into space next month. The U.S. and South Korea though suspect this launch is actually a cover for testing missile technology. Pyongyang warning any attempt to shoot it down would be considered an act of war, and so tensions remain high and we're covering that story from Seoul, South Korea to Washington today.

Also, he has told viewers how to avoid hedge fund scams, but now a former congressman has some questions for CNBC's Jim Cramer, and what he did during the boom time when he was in the hedge fund game.

And turning back now to the breaking news, a story everyone will be talking about today. Accused con man Bernard Madoff, a step closer to a possible 150-year prison sentence. Right now, Madoff is inside the federal courthouse in New York. You saw him walk in live here on AMERICAN MORNING about 40 minutes ago. Madoff is expected to plead guilty to cheating investors out of billions of dollars, and we are all over the story.

Christine Romans joins us now, as well as senior legal analyst Jeffrey Toobin also joining us this morning.

But we start with Christine. And just explain a little bit about what is going on. Because this is not a plea deal what's going on today?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's right. He is expected to plead guilty, but there is still the question what happens to any kind of accomplices. He would not do a plea deal for conspiracy, and Jeff is going to know more about this. But essentially, there are still the questions about did he do it alone? Where did all the money go? How much longer is this going to drag on until we find the full depth and breadth of this scam? Here is what the scam is. It's a Ponzi scheme. Essentially, this is taking money from investors, over some 25 years, and then when those investors want their money back, instead of investing it, he actually goes out and gets new investors to pay off the original investors. That's the classic Ponzi scheme.

This would be, I suspect, the biggest Ponzi scheme in the history of the world. It's just so much money. We still don't even know where all this money went. And how much of it was actually make- believe money in the first place. It's really a mess trying to figure out where it went.

ROB MARCIANO, CNN ANCHOR: Spoke legalese, Jeffrey Toobin joins us. First of all, Ponzi scheme, if everybody is in cahoots, and is it illegal enterprise?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, it depends what each person knew. I mean, that's the great question that's unknown. Madoff now is admitting that he - there were no investments made, that he was simply paying off the old investors with the new investor's money, and eventually like all Ponzi schemes, it runs out when too many people try to get their money out.

The question is, were his two sons involved? Was his wife involved? Was his brother involved? So far, no else has been charged. The U.S. attorney's office and the FBI is certainly going to continue the investigation and see if there were other people who really knew that there were no investments being made and this whole thing was corrupt.

MARCIANO: Is that going to happen? I mean, it seems that he hasn't cut a plea deal. He's just pleading guilty.

CHETRY: Right.

MARCIANO: He's maybe taking a bullet here for the team?

TOOBIN: Well, that's - that's certainly what he is doing. He has not made any sort of deal. He has no guarantee what the sentence will be. Given the federal sentencing guidelines, he is looking at 50 years probably minimum. He is a 70-year-old man. He is effectively looking at a life - at a life prison sentence.

Will anybody get their money back? The classic rule in Ponzi schemes is that the money just sort of disappears. Is that it's not like a $50 billion Ponzi scheme results in finding $50 billion in a Swiss Bank account. The money is just gone.

CHETRY: And that's another question I want to ask you, Christine. We heard from one of the victims this morning, who really just put it this way. He felt very angry and said that the government should have done more. That this is an emergency because there are people who are basically living with nothing. He moved back in with his father. And he feels that there should be some money given back. Is that an unrealistic notion in this situation?

ROMANS: There will be. There is money. I think that they have found some $900 million. There is money. There will be some formula that that will be all split up among the people who deserve that money. The big group of some 4,000 people, a bunch of foundations. I mean, people are going to get pennies on the dollar if they get anything, right, Jeff?

TOOBIN: They will get something, probably. But pennies on the dollar is likely. It is true that the executor effectively of his assets has found this money, and some of that will be divided up. But when you start taking out legal fees, accounting fees, taxes, it's just never amounts to very much.

By the way, there is one big unresolved legal question that we will learn today. Does he get locked up today or is he still out on bail. A lot of people are very upset that he's been out on bail all this time. A lot of people charged with much lesser crimes get locked up with no bail.

As of today, he will be a convicted felon. Even then will he be allowed to stay out on bail pending his sentencing, which probably won't be for a couple of months? That's a question Judge Denny Chin will have to answer. And I don't think anyone knows what the answer will be.

MARCIANO: And if he does go to prison, is it one of this country club-type of deals?

TOOBIN: Actually, given the amount of time, he's likely to be sentenced to, he will probably be at a pretty high security prison. And frankly, the whole country club prison is a little bit of a myth. You don't see anybody volunteering to go any of these prisons. It's no fun to be in prison. I mean, some are worse than others, but -

MARCIANO: I mean, free room and board. The guy is coming from a penthouse. (INAUDIBLE)


TOOBIN: There you go. You see, he's not looking forward I assure you.

MARCIANO: Thanks for your insight.

CHETRY: All right, thanks.

Well, also developing this morning, North Korea says it's ready to fire a satellite into space. South Korea says Pyongyang has told International Maritime and Aviation officials, this launch is going to happen between April 4th and 8th, but the U.S. believes it's a cover actually for testing a long-range missile that could possibly reach Alaska, maybe even parts of the western U.S. North Korea has threatened retaliation if anyone tries to stop it.

Meantime, Secretary of State Hillary Clinton says the U.S. is still determined to get Pyongyang to abandon its nuclear program.


HILLARY CLINTON, U.S. SECRETARY OF STATE: It is important to recognize that the North Koreans entered into obligations regarding denuclearization that we intend to try to hold them to. And that is something we're going to do regardless of what happens with their - with what they may or may not launch in the future.


CHETRY: CNN's Jill Dougherty is following the story for us from Washington.

Jill, is Secretary Clinton delivering a new kind of message when dealing with North Korea?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: I think you could say that, Kiran. You know, Secretary of State Clinton has been the point person speaking out on this most recently. And North Korea has been threatening for weeks to launch a long-range missile. In fact, all of that reached a high point even when Secretary Clinton was on her recent trip to Asia.

Now North Korea claims a launch is for a space communications research, but South Korea and the U.S. believe it's for military purposes. And theoretically, that kind of missile could hit Alaska.

So when you hear Secretary Clinton saying whether or not they launch, what she's really saying is go ahead, it's not going to change our policy. A senior administration official tells CNN, Clinton is calling their bluff. North Korea has been getting a lot of attention with this threat, but essentially what she is saying, you can act out all you want, but we're still going to push you to give up your nukes, and we're going to do that with our allies in the six-party talks.

And, by the way, Clinton says that her envoy to North Korea, Stephen Bosworth was ready at a moment's notice to go to North Korea. North Korea didn't invite him, and she says the U.S. regrets that.

CHETRY: Jill Dougherty for us this morning. Thank you.

MARCIANO: Mad money eye versus funny guy. Jim Cramer taking a beating from Jon Stewart, but there are serious questions coming from serious people about the mad man on Wall Street. Was he part of the problem? We'll talk about it.

And a onetime boom town in America's rust belt, now hoping to pull back from the brink. But is their plan for a new future working? We'll tell you. It's seven minutes after the hour.


CHETRY: It's been comedy gold, this ongoing grudge match between "Daily Show" host, Jon Stewart, and CNBC host, Jim Cramer. But there are now some serious questions from serious people about the "Mad Money" host and the role that he might have played in the market downfall.

CNN's Jim Acosta is live in Washington with more on this.

Good morning, Jim.

JIM ACOSTA, CNN GENERAL ASSIGNMENT CORRESPONDENT: Good morning, Kiran. You know, Jim Cramer is an expert for a reason. He once made a fortune running a successful hedge fund. He went on to host his own TV show "Mad Money" that offers stock tips to investors like you and me. But as Cramer has found out recently, a lot of Americans are mad at him. One former congressman believes Cramer may have crossed the line.


JIM CRAMER, HOST, "MAD MONEY": You know, I don't want to stick my neck out anymore because it seems to get chop off every single time -

ACOSTA (voice-over): The war of words has gotten personal. In one corner CNBC's "Mad Money" host Jim Cramer.

CRAMER: That comedian is attacking me. Wow.


CRAMER: He runs a variety show.

ACOSTA: In the other corner, "The Dally Show's" Jon Stewart.



STEWART: He makes it sound like I'm some kind of buffoon.

ACOSTA: Who spent the last week lampooning Cramer's bad stock calls.

CRAMER: It's a fun game, and it's a lucrative game.

ACOSTA: But this video made in 2006 has suddenly gone viral, and it's no joke.

CRAMER: Go in and take a bunch of stocks and make sure that they're higher. Maybe commit $5 million in capital and do it, and I could affect it.

ACOSTA: Cramer explains to his own financial Web site,, how he could influence stock prices up and down as a manager of a massive hedge fund.

CRAMER: By the way, no one else in the world would ever admit that, but I don't care.

UNIDENTIFIED MALE: That's right, and you can say that here.

CRAMER: I can't. I'm not going to say it on TV. ACOSTA: Largely unregulated, hedge funds were attractive to wealthy investigators, and at their peak, may have controlled more than $2 trillion in assets.

TOM DAVIS (R), FORMER CONGRESSMAN: I think he's become a poster child for why hedge funds need more regulation and transparency.

ACOSTA: Tom Davis, a former top Republican on the House Committee that investigated hedge funds last fall says Cramer's comments in the video showed the need for reform in the markets.

Now, is any of this illegal?

DAVIS: It wasn't. But it should be. He may well have crossed that line. I think that's something somebody ought to be looking at. I think the tragedy is over the last few years, nobody's been looking at this at all.

ACOSTA: Cramer issued this statement to CNN. "No one knows and respects the securities laws more than I do. I didn't go to Harvard Law School for nothing. When I was a hedge fund trader in the 1990s, I played fair and I did nothing that violated those laws. The "Mad Money" host will have a chance to explain himself in a scheduled showdown with Stewart, tonight.

STEWART: The annoying guy with the money show. I don't know. He'll be here tomorrow in this studio.


ACOSTA: And by tomorrow, Jon Stewart means tonight. So tune in. A spokesman for CNBC declined to comment on that Web video, noting that it first became public in 2007. Cramer does have his legions of fans who say tips from the "Mad Money" hosts have boosted their portfolios, but over the years, Cramer concedes he has made some bad calls - Kiran.

CHETRY: Yes. As our business units points out as well - I mean, that's what you do when you make these types of calls. You know, you make 100 calls, 60 of them can be right, 40 of them can be wrong. I mean, that's what unfortunately this is about.

ACOSTA: That's right. And that's why they have the disclaimer on the show, that, as you know, opinions expressed by this host are not those of CNBC and that, you know, stocks are not a sure thing.

But the big question about all of this is, when you listen to Jim Cramer in this video, is this whole issue that people are talking about with respect to the markets. You know, has Wall Street become a casino. And the concern is you don't want the casino to be fixed. You don't want the deck stacked against you as an investor, Kiran.

CHETRY: Of course, not. All right. Jim Acosta for us this morning from Washington. Thanks.

ACOSTA: You bet. MARCIANO: From the penthouse to the courthouse to potentially straight to the big house, as soon as today. We're following the Bernie Madoff trial. You're looking at live pictures in Lower Manhattan. It's 14 minutes after the hour.


CHETRY: Welcome back to the Most News in the Morning. Sixteen minutes past the hour. Time to fast forward to some stories that will be making news later today.

NASA is hoping for a nighttime launch of space shuttle "Discovery" on Sunday. A fuel leak forced the postponement of last night's launch at The Kennedy Space Center. You see they were all worried about the weather, it ended up being a leak. The "Discovery" crews' main mission is to deliver a set of solar wing panels to the International Space Station.

And First Lady Michelle Obama makes her first official trip outside of Washington today. She's headed to North Carolina. At 12:45 p.m. Eastern, she'll tour the Ft. Bragg military base and meet with families there. And at 4:30, she speaks to community groups in Fayetteville that provide support to the soldiers and their families.

And then at 4:00 p.m. Eastern, Oprah is broadcasting live today with a dating and violence awareness show. The talk show host said she decided to devote an entire hour to the topic after Rihanna's alleged beating by singer-boyfriend, Chris Brown. Meantime, there are new reports this morning that the couple has reconciled and they are reportedly going to record a duet - Rob.

MARCIANO: Kiran, America's Rust Belt once home with the sounds of metal and money being made. But today, many steel towns have gone bust. And when the jobs disappeared, so did the shops and the residents. Well, now, one city outside Pittsburgh is hoping to forge a new future.

CNN's Jason Carroll joins us to talk about this little town in the Rust Belt.

JASON CARROLL, CNN NATIONAL CORRESPONDENT: Little town with a lot of hope here. You hear about people talking about the economic bottom. Well, in Braddock, Pennsylvania, there is a lot of talk about it, and you're about to see why. But more importantly we're going to introduce you to someone who believes that from economic destruction, a new and prosperous Braddock can rise.


CARROLL (voice-over): The welcome sign in Braddock is a sign of hope. This former boom town just outside Pittsburgh can regain its prosperous past. When steel was king, the population was around 20,000. It's less than a quarter of that now. Home prices have plummeted. Some selling for as low as $6,000. Historic pictures show a thriving Braddock, but with most of the steel industry pulled out, businesses went with it. Now just a few remains. UNIDENTIFIED MALE: Bell's Market, it's a Braddock landmark and treasure.

LOUIS GREENWALD, OWNER, BELL'S GROCERY: I never think Braddock will ever return to what it once was. It probably come back and be something other than what it was. It might probably be even better than what it once was.

CARROLL: Drive through Braddock and see what some say economic bottom really looks like.

Is that what you believe?

MAYOR JOHN FETTERMAN, BRADDOCK, PA: No. I don't believe that it's the bottom in the sense that this is a bad place. I'm saying this is what can happen when you turn your back on a community.

CARROLL: A community where many see economic devastation, Mayor John Fetterman sees potential.

FETTERMAN: The day I become a pessimist is the day I need to find a new job.

CARROLL: Standing 6'8", this goatee, tattooed, 39-year-old may not look like a typical town mayor, but Mayor Fetterman is a driven man. He received his MBA from Harvard, and was elected and tattooed Braddock's zip code on his forearm as a sign of his commitment to the town.

(on camera): I think a lot of people would looked at a place like Braddock, where they've lost the majority of their population, most of the businesses. Why would anyone want to be mayor here?

FETTERMAN: Well, it just gets back to why wouldn't anyone want to be mayor here.

CARROLL (voice-over): For the past three years, Fetterman has offered economic incentives to lure businesses back.

DAVID ROSENSTRAUS, FOSSIL FREE FUELS: I met Mayor John. And he was very enthusiastic about having us locate into his area.

CARROLL: David Rosenstraus relocated his business Fossil Free Fuels to Braddock.

ROSENSTRAUS: When people come, you know, they see a lot of space for a very little investment.

CARROLL: This space all 147 acres of it, once a steel plant, will be redeveloped with stimulus money into a commercial and residential space like this one in a town nearby.

DAN ONORATO, ALLEGHENY COUNTY EXECUTIVE: You come back here within five years, you won't recognize this site.

CARROLL: That's Braddock optimism. (on camera): What do you see as Braddock's future?

FETTERMAN: Well, I see Braddock's future, it's not going to resemble anything what it was at its apex. I would like to see Braddock continue to become a safer, more just place that is moving towards better outcomes for everybody.


CARROLL: A lot of optimism there. Mayor Fetterman has, at times, donated his own money into projects to help Braddock. And in addition to courting businesses back, he's also trying to lure artists by offering them free space. He's hoping urban pioneers will see the same potential in Braddock that he sees.

MARCIANO: There are so many small blue-collar towns like that in the Midwest, in the northeast, that have so much character. If you just dole them up a little bit, you know, businesses may very well show up.

CARROLL: You know, and I'm hoping that - and a lot of people there in Braddock are hoping that people will see this and see that there's so much opportunity there. If you can just get beyond some of the urban blight, a lot of opportunity, a lot of people there who want to work.

MARCIANO: All right. Jason Carroll, great story. Thanks.

CARROLL: All right.


CHETRY: Well, for the first 52 days of the administration, all eyes have been on the president, but First Lady Michelle Obama is keeping a full schedule of her own, and we're taking a look live from the White House.

Also, preaching the gospel of great sex. A pastor's sermon and some giant billboards are stirring things up in rural Alabama. We'll ask the pastor about the message that he is trying to convey. It's 21 minutes after the hour.


CHETRY: All right, welcome back to the Most News in the Morning.

President Obama getting some pushback from Capitol Hill, including some Democrats on signature proposals. Now among them, limiting tax deductions for the wealthy, also tapping greenhouse gases and, as well, cutting agriculture subsidies. The president says that the cuts will help pay the government's bills, especially for some big projects like universal health care. But opponents like Democratic Senator Max Baucus, want the president to find the cash somewhere else.

Senator Baucus joins us now from Capitol Hill. Thanks for being with us this morning, senator.


CHETRY: So he - the president's budget plan would want to cut back on how much money you can deduct if you make over $250,000 in your household when you give money to charities. And you, along with several other prominent Democrats, including Charlie Rangel are not happy with this proposal. What are your biggest concerns?

BAUCUS: Well, frankly, I think it's a much larger issue, and that's the economy generally, and on health care reform, a little bit more specifically. That proposal you refer to suggested is part of health care reform. As we work through health care reform, and that is so important. Health care reform is probably the next most important item that we could undertake in our country. Then we'll look at ways to pay for health care reform. And, hopefully, the goal is health care reform pays for itself. Now lots of different provisions within health care, and also within the code to figure out some way to get good sold health care reform plan.

CHETRY: Right. But you specifically are mentioning your concerns, as did others, about this people in that current tax bracket. The 35 percent tax bracket would see their deductions to charity drop from 35 cents to 28 cents. And you expressed concerns, as well as others, that this would actually lead to a drop in charitable gifts to charities.

BAUCUS: Well, it's - actually, it's not just charities. It's also - it would discriminate against those people who live in high tax states or have high sales tax or income tax, because that deduction, too, would be limited, as well as mortgage interest deduction. That would be limited. So the whole bunch of them, frankly.

But the main point is let's get - look at the bigger picture here, figure out all the component parts to accomplish a bigger picture. For me, that's health care reform.

CHETRY: And listen to what President Obama said about flexibility being needed as you try to work out something as huge as health care reform.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: In this effort, every voice has to be heard. Every idea must be considered. Every option must be on the table. There should be no sacred cows. Each of us must accept that none of us will get everything that we want.


CHETRY: So there he is talking about the fact that there can't be any sacred cows, but there are many measures that he is proposing that have had pushback not only from Republicans but from Democrats as well. And we tick off a few in the introduction here. But how would you pay for, if you're not liking this situation with the tax deductions. How do you end up paying for it if everybody has a concern in fitting in these pieces of the puzzle, and you got to get the money in order to undertake such a huge program?

BAUCUS: Well, there's a bit of a misconception with all due respect, that this is just more money to pay for a new program. That's not what health care reform is. Health care reform is reforming the system so we get a lot more quality for the dollars that we pay.

Right now in America, when you pay a doctor or a hospital, that hospital or doctor is reimbursed on the basis of volume. How many procedures? Not reimbursed on the basis of quality. We want to start to group this system so that a doctor or a hospital is paid, that he or she is paid on the basis of quality. And that in and of itself will start to get some of the costs down, and that will get some savings down.


CHETRY: No, I get what you're saying, but there are many economists and policymakers who say it's going to involve a trillion dollar at least investment to eventually reap those benefits down the road. And you know what type of financial situation we're in right now.

BAUCUS: Well, that's, that's - that's also what we tend to pay for that. The goal is to pay for that within this system, including some tax measures as well. Health care reform is most important item we could undertake to get our economy back on track. Peter Orszag, the OMB director said that, the president said that. It is clear that health care reform, because it's just too costly. We spend too much on health care today.

CHETRY: All right. Absolutely. Well, thanks for your time this morning. Senator Max Baucus, great to talk to you. Thanks for being with us.

BAUCUS: You bet. Thanks, Kiran.


MARCIANO: All right, Kiran. It's coming up on 29 minutes after the hour. A lot to cover this morning. Here are some of the stories we're watching right now.

Bernie Madoff is expected to plead guilty today to the biggest rip-off in Wall Street history. We saw him walk into federal court in Lower Manhattan just a little over an hour ago. Madoff could die in prison if the judge gives him the max sentence of 150 years.

Three years in prison for the Iraqi journalist who threw his shoes at former President George Bush in December. That sentenced handed down by an Iraqi court early this morning. The journalist was hailed as a hero in many parts of the Islamic world. And China issuing an ultimatum this morning. Its defense ministry is demanding the U.S. and surveillance missions off the southern coast of China. That followed a confrontation at sea between one of the U.S. ships and several Chinese ships this weekend. And you can bet that will come up when President Obama sits down with China's top diplomat later today.

Meanwhile, First Lady Michelle Obama has been awfully busy during the first 52 days of her husband's administration, and that hasn't gone unnoticed from a former first lady.


CLINTON: I know a little bit about the role that Michelle Obama is filling now. And I have to say that in a very short time, she has, through her grace and her wisdom, become an inspiration to women and girls. Not only in the United States, but around the world.


MARCIANO: White House correspondent Suzanne Malveaux is live in Washington with the latest on the First Lady's agenda - putting the wife to work.

Hi, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, how's it going? Actually, Michelle Obama, when I got to chance to cover her in a documentary, she said really it was important to be organized and keep a routine for the sake of the family and the kids, that their whole life had been turned upside down. But we are now seeing that she has embraced this role of first lady and a lot of people are noticing.


MALVEAUX (voice-over): Inauguration night. Michelle Obama makes her debut. And she hasn't stopped since.

MICHELLE OBAMA, FIRST LADY: Do you see who is up here with me?

MALVEAUX: In her seven weeks as First Lady, she captured the nation's attention like no other.

NIA HENDERSON, POLITICO.COM: Well Michelle Obama is out of the gate much faster and more focused than most of the first ladies we've seen over the last couple of years. Laura Bush by her own admission had a real kind of late start. Hillary Clinton had been traveling in early March and meeting with folks on the Hill over health care.

MALVEAUX: Gracing the covers of "Vogue," "People," "US Weekly" and "Essence," even Oprah is moving over to make room for Michelle. It's hard to believe nine months ago, the New Yorker satired her as a radical. This month she is sashaying down the catwalk.

M. OBAMA: You're all invited. MALVEAUX: Once dogged about questions about patriotism, Michelle Obama has fully embraced it. A major part of her portfolio is supporting families of the troops and today all eyes are on her visit to Ft. Bragg. In D.C., the First Lady hit the ground running, visiting federal workers. She also made surprise appearances going out for lunch and visiting soup kitchens and schools.

M. OBAMA: A place where they make candy and chocolate!

MALVEAUX: But before she even became first lady, she told me her first priority was clear.

M. OBAMA: I like order. And I thrive in stability. And I find that my kids thrive in the same regards.

MALVEAUX: Mommy in chief to her daughters, Sasha and Malia.


MALVEAUX: Rob, they go to parent-teacher conferences. They still read at night to the kids. So they are obviously trying to keep that routine. As far as today is concerned, she is going to be going to the military families to the troops and encouraging them and supporting them. And we understand that she is going to debrief her husband, if you will, tell them what they are talking about and tell them what some of their concerns are. Rob.

MARCIANO: A little conversation at the dinner table tonight. Suzanne Malveaux live for us at the White House. Thanks, Suzanne.


KIRAN CHETRY, CNN ANCHOR: Numbers just in to CNN. The latest numbers on the job market. Christine Romans is "Minding your Business" and she joins us now with more. These are the new jobless claims for the week.

ROMANS: And this measures how many people, Kiran, lined up for unemployment benefits for the first time in the most recent week. It's 654,000 people. Six hundred and fifty-four thousand people lined up for unemployment benefits for the first time in the most recent week.

To give you some perspective, last year in the very same week it was 347,000 and we were already under way in a recession then as well. So what this tells you is that the jobless situation is accelerating. A lot of people losing their jobs, lining up to get unemployment benefits. Looking at the states that have the most increased, it's Indiana, Pennsylvania, Michigan, Tennessee, Virginia, North Carolina.

This is where you're feeling it, folks. South Carolina, Wisconsin, Georgia, Oregon, California and New York had 16,000 more people lining up than in the prior week for unemployment benefits. A big jump there. So in all different kinds of industries as well. Manufacturing, the rubber industry, service, trade, transportation. So what this is telling us is that the labor market is continuing to deteriorate and, remember, this is what we call a lagging indicator.

That means even after the economy starts to get a little better, we're going to see these numbers continue to look ugly. So that's, I guess, is the bright spot is that the economy is going to turn around before these numbers do and this is still showing us that the labor market is rough.

CHETRY: All right. Save or create three to four million jobs, it seems like we're going to more than that.

ROMANS: That's absolutely right.

CHETRY: Christine, thanks.

MARCIANO: And there is always god. An Alabama pastor is preaching great sex to promote his church sermons. As you might imagine, it's causing a bit of stir in his rural community. We'll talk to the pastor straight ahead.

And with the economy in recession, one group is very hard at work - scammers. They are armed with new tricks and schemes. We'll tell you what to watch out for just ahead.

It's 34 minutes after the hour.



The pastor of a rural Alabama church is preaching the gospel of great sex. As you might imagine, not everyone in the community is saying amen. He is using billboards with the message great sex god's way to promote his sermon. And Jerry Lawson, pastor of the Daystar Church in Good Hope, Alabama, joins us now from Birmingham. Thanks for being with us this morning.

JERRY LAWSON, PASTOR OF DAYSTAR CHURCH: Thank you, Kiran. And good morning.

CHETRY: All right. So you got our attention. What is the message that you're trying to convey when you show those billboards?

Sure. Well, you know in the world today, there is so much emphasis on sex. And you hear - it seems to be a one-sided debate from the media and movies and internet. And we just felt like god's opinion should be inserted into the mix. He created man and woman. Therefore, he created sex. And it seems like everyone else gives their opinion but his opinion is not heard enough. So we just wanted to insert him into the conversation.

And so what is the message to your people in your congregation? Married people? And also single people about dealing with issues surrounding sexuality?

LAWSON: Well, there is a lot of things we try to talk about. First of all, god's way of sex is very straightforward in the scripture. It's a husband and a wife only within the confines of marriage. But we also talk about, you know, how to get over some past mistakes sexually. It seems like when a person makes a sexual mistake, it seems to linger. There is guilty and the bad feelings. We talk a lot about just how to be forgiven from things you feel ashamed of and that sex in itself is nothing to be ashamed of. It's something to be understood in god's context.

CHETRY: What about critics who say you know what sex should be taught at home. It's not the place of the church. It's not the place to be talked about in a public forum.

LAWSON: Sure. I understand that. And, you know, we have different services for children age 12 and under. So we're basically just talking to older kids that we believe should have - by the time you're 13, probably should have had the sex talk with your kids by then. And of course, we release a disclaimer before the topic is bridged that, you know, if you have younger kids and you don't want them in here, that's fine. But the bottom line, Kiran is, it's a major part of the Bible and we're just Bible people. So we make no bones about it. We're going to talk about whatever is in the Bible.

CHETRY: The mayor of Good Hope is only 22 years old and he said while you may have reasons for doing what you did, he thinks that the sign is out of place, and that residents have a problem with it because of the public way it's being promoted. Do you kind of see where he is coming from? And what do you say to that?

LAWSON: Well, what I would say is that the outcry that we've received has been incredibly positive. I thought you might ask that. I brought just yesterday's e-mails. This is just the e-mails I got yesterday on it. There are 130 something here, five, exactly five were negative out of all of these. So think what that says to me is that the world is hearing our community has heard the other side of the debate, and they are tired of a one-sided debate and they really like to hear what god has to say about it. And so you know we're happy to do that. We're god's people and we're using his word, the Bible, and we're happy to share what he says about it.

CHETRY: Yes. It's interesting that you say that sex should be, you know, within the confines of marriage. There was an online survey that was done in 2007 showing that 20 million marriages are believed to be sexless and that certainly can be damaging, especially not only for the two people involved, but for the family at large. So very interesting issue. Great sex god's is the website. We want to thank you for coming on to talk about it this morning.

LAWSON: Thank you. My pleasure, Kiran.

MARCIANO: Did I hear him say sex is a major part of the Bible? I don't remember that in Sunday school.

CHETRY: You need to pick it up and read it more often!

MARCIANO: I'll get to it tonight. A bedtime story perhaps.

All right. A story you can't afford to miss. Con artists are working overtime to take advantage of the recession. Personal finance editor Gerri Willis will be here to show you how you can avoid getting ripped off.

And John Edwards on morality. The man who committed adultery fields a very interesting question from a student. It's 41 minutes after the hour.


MARCIANO: The government stimulus plan to kick start the economy is already turning in to big business for con artists. So how you can avoid getting scammed. Let's turn on to personal finance editor Gerri Willis. I can't wait to hear some of the imagination and creativity -

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: You have no idea. You know, you have to be so careful out there, right now. Because I have to tell you, the stimulus bill is stimulating crooks. That's according to the Better Business Bureau. Scam artists are using all the headlines, the confusion about new government programs and of course, the recession, to try to steal your money.

Take a look at this website. It is promoting an easy grant solution kit. Doesn't that sound nice? As a matter of fact, the website says you could lose hundreds of dollars you didn't know you had. This economy is forcing many government programs to shut down. Not true. Do not fall for this. Do not give them your credit card. They're going to charge you once, maybe twice, maybe often. It's a scam.

Here is another scam that's tripping people up as we wade through tax season this year. It's an e-mail. Hey, it even went out to some of our AM staffers here. Read this. Take a look. We have determined that you are eligible to receive a tax refund. Who doesn't want $189.60? I ask you. You would think this would be a good thing to respond to. In fact, you should really pay attention to it.

Here is why. The IRS never e-mails people. Never. Never, never. You are not going to get an e-mail -

CHETRY: Delete it immediately. I think I got that one, too.


MARCIANO: Even when it has an odd number that seems real because I'd fall to that.

CHETRY: And they also take the logo and you know, they put it on there so it appears authentic. So how do you know what is real and what is not?

WILLIS: Well, you don't know. Obviously, if you're getting - if you're getting e-mails in your inbox that are proposing to give you money for free. Guess what? It just doesn't exit. I know times are hard and you want to find some cash but this is a bad thing to do. One thing you can do is file a complaint with the Federal Trade Commission, the Federal Bureau of Investigation and the Better Business Bureau. But let me tell you how convincing some of these stuff is.

The first one I showed you, it has the CNN logo on the web page.


WILLIS: CNN. A calm of other big news outfits are on that web page as well. You have to be careful when you respond to these things and make sure that you know what you're signing up for. Don't deal with IRS e-mails. They don't do that.

MARCIANO: All right. A lot of my friends have always thought CNN was a scam, that they even pay me. That is realistic. All right. Great advice. Thank you, Gerri.

All right. Well, this morning the Iraqi journalist who grabbed headlines from throwing his shoes at former President Bush has been sentenced to three years in prison.

Here's CNN Nic Robertson with a look at the trial and the charges.


NIC ROBERTSON, CNN CORRESPONDENT (voice-over): Outside the court, anger at the verdict. Journalists Montada Al Zaidi's family protesting loudly against the three-year sentence for assaulting a visiting head of state. His brothers and sisters cursing former President Bush and Iraq's prime minister Nuri Al Maliki.

Back in December, Al Zaidi's shoe-throwing stole the limelight from President Bush's farewell visit to Baghdad. Simultaneously capturing the hearts of many in his nation and the region for an act seen in the mid east as a huge insult. The local news reporter says he acted out of passion, angered by President Bush's talk of Iraq's achievements. As he threw his shoes, he says he was thinking of all the Iraqi deaths and the suffering that he blames on President Bush.

Iraq's lawyers flocked to his cause. Seventeen of them in the court for the trial. They say Al Zaidi never intended to harm the former president and had already had the trial successfully suspended almost a month ago, claiming Bush's visit was not official. The judges asked the government to clarify and when the trial resumed inside the central criminal court, normally used to try terrorists, the judges got their answer. Bush's visit was official. Within an hour, the trial was wrapped up and the verdict was delivered. Muntadhir al Zaidi guilty. His lawyers say they will appeal. Nic Robertson, CNN, Baghdad.


CHETRY: And as Nic mentioned, the journalist was hailed as a hero in many parts of the Islamic world. In fact, Saddam Hussein's hometown Tikrit has a statue of the shoe to honor the journalist.

Well if you run or exercise, you're going to want to hear this. It might be time to replace your shoes. Our Dr. Sanjay Gupta is answering your questions.

It's 49 minutes after the hour.

Elephant in the room? A student asks John Edwards about moral standards during his first appearance in months.

You're watching the Most News in the Morning.


CHETRY: I got both Sanjay and Rob here today from Atlanta.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: John's gone and the boys from the south have to come to take care of you.

CHETRY: That's right. I love it.

Well, welcome back to the Most News in the Morning. It's Thursday and that means it's time to dig into our mailbag.

Dr. Gupta as always joins us from New York this morning. Not always, he's usually in Atlanta. So let's dive right in.

Our first e-mail question is - my granddaughter - this comes from Teresa in New Jersey. She says, "My granddaughter is one-month old and had a blister caused by MRSA. What can you tell me about MRSA in infants? And what are the treatment options for a one-month old?"

That's scary.

GUPTA: Yes, very young. And MRSA, a lot of people probably already know this but it's Methicillin Resistant Bacteria. So, it's a type of bacteria that just doesn't respond well to antibiotics. Newborns, babies aren't necessarily anymore more at risk of developing it compared to an adult, but the problem is their immune systems are not still completely developed. So, infection in a young baby that young can be a more serious affair.

Basic rule of thumb. If there is some sort of lesion or something on the skin that's worrying you but there's no fever, then probably just some sort of topical antibiotic is going to do it. Fevers are a big concern for this rash or lesion. And really a fever in a newborn period is always a concerned.

Again, because their immune system has not fully developed. You got to be a little more cautious when it comes to newborns.

MARCIANO: Another free prognosis by Dr. Gupta. You're welcome. Question.

GUPTA: They're no free. I'll be charging you, Rob.

MARCIANO: Barbara in Georgia asks, she says "I'm a 63-year-old female who walks four plus miles a day, approximately," - yes good job there - "approximately how many miles before I need to replace the shoes?" I didn't know that you're a shoe expert, but there must a doctor answer to this.

GUPTA: Well, there is. Fitness and health, you do it as safely as possible. Obviously, a big concern. It's interesting. Because we actually did have to look that up. We talked a lot about runners but not as much about walkers. It's great that you're walking especially that much, four miles a day. You're putting less strain on your shoes and your feet as compared to runners.

So, on average, if you were to run - walk this much regularly, about 1,500 miles or so you could walk without having to replace those shoes. That's several months of walking. So, keep an eye on the shoes. Runners - incidentally, about 350 to 400 miles before you should start replace those shoes.

Other things that you can look for in your shoes, I guess this is no surprise to people, look if those shoes appear imbalanced in some way, if they are uneven on flat surfaces. The heel is significantly worn. If you're experiencing aches and pains. The shoes can look awful on the inside and look fine on the outside as well so don't just look at the outside.

CHETRY: Right.

GUPTA: If you have your toes sticking out, probably time to get...

MARCIANO: That's a sign.

GUPTA: A sign to get new shoes.

CHETRY: Can you tell the difference though when you get new ones, I should have gotten these a while ago.

GUPTA: That's right. You're running faster and better and all that.

CHETRY: Exactly.

MARCIANO: All right. Sanjay, the shoe expert. Nice work there.

All right. If you have a question for Sanjay, logon to and send in your question and Sanjay will answer it on the air. Of course, we'll take your I-reports as well, right here on AMERICAN MORNING. That will be next Thursday with Sanjay.

CHETRY: There you go. Good to see you, Sanjay.

GUPTA: Thank you.

MARCIANO: All right. John Edwards grilled publicly about morality and holding public officials to a higher standard. So how did he answer? Touchy question.

It's 55 minutes after the hour. (COMMERCIAL BREAK)

MARCIANO: Welcome back to the Most News in the Morning.

In his first public appearance in months, former presidential candidate John Edwards couldn't avoid the elephant in the room. A student asked him about politicians and morality.

CNN's Deborah Feyerick has his answer.

It was a certainly a difficult one to avoid, I'm sure.

DEBORAH FEYERICK, CNN CORRESPONDENT: Yes. Absolutely. As much as we wanted to but you remember John Edwards? Well, he is the former presidential contender who dismissed rumors he had an affair with a campaign worker and then later she admitted that yes she had been involved with his video biographer Riley Hunter. But no longer the father of her infant daughter.

Well he has kept a pretty low profile since his televised admission. But when Brown University asked him to speak to faculty and students in a closed to media event on Tuesday, he decided why not? It was during the question-and-answer session that Edwards indirectly alluded to the affair. A young woman who said she had supported him during his campaign said, do people hold qualified politicians like himself to an unfairly higher moral standard.

Mr. Edwards answer with what can be best described as a non answer.


JOHN EDWARDS, FORMER PRESIDENTIAL CANDIDATE: But I think every single person you and every person in this room, every person in the country has an absolute right to make that judgment for themselves. And I don't think it's for me to impose my judgment on anybody about what they can consider and what they can't consider. I think that I have my own view which I'm going to keep to myself tonight.


FEYERICK: He did get a lot of laughs and applause after that. Could this be a comeback strategy for the one-term senator from North Carolina? An Edwards spokesman did not return our call. But no cameras at all were allowed to record this speech. Edwards did agree to be filmed coming and going and he was surrounded by security guards and he did not stick around after the speech was over. Some students were quoted saying they're pretty disappointed that Edwards did not say anything new in the speech titled "Beautiful America." Speaking just generally about the challenges that the country is facing. They thought it was an opportunity for him to possibly address it but when he started talking about his judgment compared to other people's judgment, I think there was a little tremor amongst the audience.

MARCIANO: He might have a shot at it down the road. You know, we'll see. CHETRY: That is where the country goes.

MARCIANO: Deborah Feyerick, thank you.

FEYERICK: Any time.

MARCIANO: All right. Well, thanks for joining us on this AMERICAN MORNING. We'll see you back here tomorrow.

CHETRY: You're back too.


CHETRY: All right. We look forward to it. Thanks so much for being with us today. And right now here is CNN NEWSROOM with Heidi Collins.