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Casey Anthony Leaves Jail; Japan Wins Women's World Cup Soccer Finals; Heat Waves Grips Midwest; London Police Commissioner Resigns Amid Scandal; Petraeus Hands Off Afghan Command; Iowa Congressman's Home Invaded; Debt Talks Set to Resume; Berlusconi in Court; Egyptian Cabinet Shakeup; Nelson Mandela Turns 93; Marine Asks Betty White to the Ball

Aired July 18, 2011 - 07:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ALI VELSHI, CNN ANCHOR: A top newspaper executive and London's top cop the latest casualties of the UK hacking scandal. One arrested and the other forced to resign. Rupert Murdoch's media empire is reeling on this AMERICAN MORNING.

KIRAN CHETRY, CNN ANCHOR: And good morning. Thanks so much for being with us. It's Monday, July 18th. Welcome to AMERICAN MORNING.

VELSHI: Christine is off today.

CHETRY: Christine's off. Yes. She's on vacation.

VELSHI: This week. Yes.

CHETRY: For one more week, and we're following the latest on the hacking scandal, buy also, on a change of command. General David Petraeus has performed his final official act as commander of NATO forces in Afghanistan. Earlier this morning, he handed off his authority to the new commander, Lieutenant John Allen. Petraeus is retiring from the army at the end of next month to take over the CIA in September.

Right after Labor Day. The threat of the government not being able to pay its bills is looming larger this morning. The clock ticking towards the deadline, just 16 days and counting. The president and Congressional leaders are expected to meet again this week. At the same time, the Senate will begin debating a scaled-back fallback plan. And yesterday, both sides say they're optimistic that they'll strike a deal.

(BEGIN VIDEO CLIP)

REP. CHRIS VAN HOLLEN, (D) MARYLAND: I'm confident that cooler heads will prevail, and at the end, we will not allow the United States to default on its debts despite the fact there are some people that seem to think that that will be OK.

KYL: If the president keeps insisting on raising taxes on American workers, there's not going to be a deal. I do think, however, that Republican leaders will not allow the country to go into default.

(END VIDEO CLIP)

VELSHI: President Obama insisting both parties must agree on a deal by Friday in order for it to get passed by the August 2nd deadline.

CHETRY: Casey Anthony getting her first taste of freedom in more than three years after she was acquitted of murdering her daughter, Caylee. Anthony walked out of the Orange County jail yesterday with her attorney seen there, Jose Baez, and was quickly driven away by her defense team to an unknown place. CNN's David Mattingly is following the trial. He's also following where Casey is now. And he is live in Orlando. The defense team is not talking about that. They did let her family know she is OK, they are just not saying where she is.

DAVID MATTINGLY, CNN CORRESPONDENT: That's right. That came in the form of a text message from Jose Baez to the family, to Casey Anthony's parents, saying that she was safe. That gave them some comfort.

And speaking through their attorney, they say they do not believe she is any longer in central Florida. But beyond that, the public whereabouts of Casey Anthony are still under wraps. She has been free now just a little over 24 hours, and people still trying to cycle through all of the intense emotions from this case.

First of all, just a few minutes after midnight, she walked out of the jail, there were hundreds of people out there, many of them shouting at her, calling her a murderer. Her SUV sped off into the night. The police had to block traffic to make sure that nobody followed. There were police there on horseback to keep the crowd back as well. So people there, this all lasted about 30 seconds. And shortly after that time, most everyone dispersed and went home.

A little later in the day on Sunday, though, we saw a lot more people going out to the site where little Caylee Anthony's body was discovered. This was near the Anthony home here in Orlando. What we saw, there was probably about -- cars a half mile long parked on the roadside as people were coming in, going to that site to the memorial that has popped up there on the location where her body was discovered.

There was also a march yesterday, very peaceful march, people walking from that site to the Anthony home in the neighborhood nearby, very peaceful. But again, so many intense emotions around this case not going away, people trying to work through those in the last 24 hours.

And soon we are going to see Casey Anthony probably coming public again to deal with all of the legal entanglements she still has, a civil cases that are still out there. At this point this is a time for healing, people trying to deal with the emotions that they have about this very intensely watched case. Kiran?

CHETRY: Thanks so much. David Mattingly for us this morning with the latest. Thanks.

VELSHI: The FBI is investigating an armed home invasion at the farmhouse of Iowa Congressman Leonard Boswell. The intruder reportedly entered Boswell's home Saturday night and point a gun at his daughter demanding money. We are told the 77-year-old Boswell struggled with the gunman before his grandson grabbed the shotgun and pointed it at the intruder. He fled and no one was hurt. Police are calling the break-in a random act.

CHETRY: There has been a major shake-up in the Egyptian government but it's not clear if it will be enough to satisfy opposition protesters who want change. Egypt's prime minister appointed 14 new ministers to his cabinet, keeping 13 others in place. The new members will be sworn into office today.

Meanwhile Former Egyptian president Hosni Mubarak reportedly slipped into a coma yesterday. The hospital's spokesman tells CNN that he has since regained consciousness.

Two court hearings today for Italian Prime Minister Silvio Berlusconi. He is expected to attend one where he is facing corruption charges, in the other accused of paying for sex with a 17-year-old girl. A judge threw out all of the defense motions in that case this morning and ordered Berlusconi to be in court for a hearing October 3.

VELSHI: A top news corporation executive and London's top cop are the latest casualties in a U.K. hacking scandal. Former "News of the World" editor Rebekah Brooks was arrested over the weekend. She has since been released on bail. British lawmakers now say they do expect her to testify tomorrow at a House of Commons hearing. And now London's police commissioner has been caught in the fallout as well.

Let's get the latest from Dan Rivers live from London this morning. Dan, explain to us why she was arrested and -- what she is charged with if we know, and why this top cop has resigned.

DAN RIVERS, CNN INTERNATIONAL CORRESPONDENT: She has been arrested as part of this ongoing inquiry into phone hacking that is looking like it is just getting ever bigger and bigger. She was once an editor of the "News of the World." She's laughingly been chief executive of the parent company News International.

And the suggestion is, although she's denied it, that she in some ways knew about these illegal activities at the "News of the World" or even worse perhaps even commissioned them herself. She has always said she knew nothing about it. Initially -- she -- the paper claimed it was just the activities of one rogue reporter. Now we know it was bigger than that, and that's why she has been taken in for questioning.

She has not been charged, yet, though, and that's important to stress. She was questioned for about 12 hours yesterday and released in the early hours of the morning here in London. But she has not been formally indicted or charged here yet.

But then the even more sensational development was that the top policeman in the country, Paul Stephenson, resigned yesterday as well just shortly after Rebekah Brooks was taken in for questioning, an incredible development. This all stems because of various revelations about the kind of cozy relationship that existed between the police and former "News of the World" staff and deputy editor Neil Wallace in particular.

Now he had a PR contract to represent the police. It was then revealed that Sir Paul Stephenson accepted hospitality worth almost $20,000 at a hotel after an illness that he was recovering from. And who represented that hotel, that health resort? None other than the very same Neil Wallace.

Now, they are not saying the two are connected, but it does build a pretty kind of murky picture of a very kind of symbiotic relationship. Paul Stephenson gave a conference saying he resigned, basically saying he had done nothing wrong.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: However, the issue of my integrity is different. Let me state clearly -- I and the people on who know me know my integrity is completely intact. I may wish we had done some things differently, but I will not lose any sleep over my personal integrity.

(END VIDEO CLIP)

RIVERS: So he's insisting he has done nothing wrong. His integrity is intact. But I think it was a question of the image that was coming across to the general public here, one in which, you know, former news of the world journalists were working for the police who were then accepting in turn hospitality from a company that those same people were representing. All the while they are supposed to be investigating the "News of the World" for illegal activities. It is not how they should be doing things in an ideal world.

VELSHI: Dan Rivers, thanks very much for that. Dan Rivers following this constantly developing story for us in London.

Some scary moments for performers and spectators in Ottawa, the blues fest in Canada. The stage collapsed last night during a severe storm with 55-mile-an-hour winds. The group Cheap Trick was on stage at the time. The manager says everyone was shaken up, but the band and crew weren't injured. And amazingly just one person in the crowd was injured by this.

CHETRY: People on the edge of their bar stools across U.S. and Japan. It was a riveting Women's Cup Final. The U.S. dominated the beginning of the match, but by the end the teams were tied. Then it came down to penalty kicks. And the U.S. was actually flawless in their penalty kicking against Brazil -- not the case unfortunately in their penalty kicking against Japan. In a stunning rally, Japan defeated the U.S., taking home their first ever World Cup title.

U.S. fans gathered around the world to watch yesterday's game, and despite the upset, some Americans say they were inspired by Japan's win, a victory for a nation still reeling from the devastating earthquake and tsunami.

VELSHI: Ahead you can see this one coming, a female air traveler arrested and charged with groping a TSA agent at a Phoenix airport. You are not going to believe how this went down. CHETRY: Also, a brutal heat wave baking the Midwest. The east is next, and 40 states expected to swelter. Rob Marciano has the latest for us.

VELSHI: And it's the day after tomorrow in Hollywood. Did L.A. survive "carmageddon"? We will tell you after the break. It is eight minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: So a lot of people are very worried about what's happening with the closing of the 405 freeway in southern California because of construction work that they were doing. It turns out it didn't cause the end of the word. California drivers, many of them were scared and many of them made alternate plans because this is one of the busiest freeways in the world, and it was shutting down. There were a lot of people concerned about hours being backed up because of a 10 mile segment of the 405 closed over the weekend so workers could make way for a new car pool lane.

So the project actually wrapped up ahead of schedule. The 405 reopened early. And because a lot of people made alternate plans they were allowed to work from home it wasn't "carmageddon."

VELSHI: All right, a newly created Facebook page calls for the Rosa Parks of air travel -- which is a little ridiculous. A 61-year-old Uukari Mihamae of Colorado has been arrested and charged with groping a female TSA agent in Phoenix last week after refusing to be screened. She allegedly grabbed the agent's breast was both hands and twisted.

Mihamae is charged with sexual abuse, but one follower on her Facebook page is suggesting they name an airport after her. We need not get to carried away with glorifying people who do thing to TSA agents. They may not like what the TSA does, but I can guarantee you that agent didn't start the policy. I just don't think we should be -- not nice to the TSA agents.

CHETRY: This woman -- you know, act, whatever that she did out of frustration, she's clearly paying for it. Now she has a legal battle ahead of her.

VELSHI: Yes.

CHETRY: The worst heat wave in years is rolling across the U.S. this year. Some 40 states gripped by sizzling temperatures at some point over the week, and extreme humidity.

VELSHI: Scorching summer heat is dangerous. It is already causing hundreds of health emergencies and doesn't look like it is letting up. Ted Rowlands is live now from Minneapolis. What's it looking like out there, Ted?

TED ROWLANDS, CNN CORRESPONDENT: Not too bad right now, but it is expected to get brutal later today here and in other cities around the Midwest, Chicago, St. Louis, all facing heat advisories. Temperatures are going to be not only uncomfortable but also possibly dangerous. (BEGIN VIDEOTAPE)

ROWLANDS: With the heat index over 100 degrees, fans at Sunday's Minnesota Twins game did whatever they could to keep cool.

UNIDENTIFIED MALE: Brutal. I probably lost 10 pounds today. It is crazy.

ROWLANDS: Several fans ended up needing medical attention. This man was suffering from severe dehydration.

Across the country it has been a brutal summer with this dangerous heat wave sizzling in as many as 40 states. In Oklahoma, 27 days have been over 100. Heat is blamed for this water main break and for this section of buckled freeway that's sent a motorcyclist to the hospital.

It was so hot last week in Norman, Oklahoma, this guy says he fried an egg on his dashboard. In Texas a lack of rain is forcing farmers to sell their cows because the grass to feed them won't grow. This woman in Houston summed it up in a CNN iReport.

UNIDENTIFIED FEMALE: We are sweltering, and we are just asking for some relief here. Houston is hot as blazes. Stay put, stay cool.

ROWLANDS: Or as experts say, take it easy.

UNIDENTIFIED MALE: When the body is active it develops heat. You need to generate that heat and get rid of that heat. Unfortunately when it is hot outside, it is harder to do that. So you can overheat. That leads to heat exhaustion and sometimes heat stroke.

(END VIDEOTAPE)

ROWLANDS: And many cities around the Midwest have opened cooling centers, including Chicago where cooling centers will be open today and through the entire week. The Twins are playing a double-header here in Minneapolis. There are a lot of watering stations at Target Field that will be set up for fans. One fan told me, though, Ali and Kiran, that he would rather take the heat than 30 below.

So, I guess one extreme or the other here in Minnesota.

VELSHI: That's a unique issue with Minneapolis and places --

CHETRY: Right. It would be nice to sometime just be in the middle.

VELSHI: Yes, 70 would be great.

All right. Ted, thanks so much.

Well, what is the situation across country, because different parts of the country, different states, have been feeling this over the course of the last week or so and over the course of the next week at different times.

Rob Marciano is in the extreme weather center to paint a bit picture with a lot of red and purple.

ROB MARCIANO, AMS METEOROLOGIST: Yes. And you know, the dreaded pink. That's when it gets really bad.

You know, we had this blob or dome of really hot air that's really just been kind of hanging around the east central part of the country the past two or three weeks, and it's just has been shifting positions. Now, it's is up into the north central part of the country. And by my account, 11 states right now that have excessive heat warnings, 16 states that have some sort of advisory or watch necessary effect as well. They go well into Canada. As a matter of fact, Toronto set a record high as well. So, everybody north of the border seeing a little bit of action.

The heat indices are going to be the big problem. We had a dew point reading of over 80 degrees yesterday in Minneapolis. That is ridiculous levels of humidity. And you couple that with the heat and it's going to feel like 110 today and tomorrow as well, going to feel like 102 in Kansas City. Looking ahead towards Wednesday, still up century mark as far as what the heat index will be, what it feels like in Minneapolis.

And then Thursday and Friday, we got a little cool front that comes down and knocks down the heat and shifts it down to the South and East. But until then, it is a long duration of event. And area that doesn't get this kind of heat. That's not great news.

All right. Tropical storm Bret, 50-mile-an-hour winds right now. Just east of West Palm Beach by, say, 150 miles an hour, right over the Bahamas. Just kind of drifting there right now. It is strengthening and gather something intensity. We do expect it to continue to do that. Maybe get to hurricane strength. But very unlikely it gets close to U.S.

And, you know, that's good news and in a way, yes. But when you have a -- you know, moderate to strong tropical storm, not all bad news, especially when you have a drought in Florida, in the southeast. So, we would take the storm in this particular case.

Here's your hazy, hot and humid conditions. Storms expected across the Northeast today with this cool front trying to press through the South, and then isolated storms to the South. We are seeing thunderstorm right now that's producing some rough weather and across Gulfport, Bay St. Louis, there's a tornado watch warning out that's posted for Harrison County, potentially a little water spout that's developed here along the beach line. And it will be heading parallel along highway 90 and then down i-10 over the next 20 to 30 minutes.

Water spout detected by the radar there. Take cover. Pass Christian, or Bay St. Louis and points to the east. South of Gulfport to try to stay cool in this searing heat.

Back to you, guys, in New York.

CHETRY: Rob, thank you.

Well, an extraordinary animal discovery caught on camera. Rare snow leopards spotted in the mountains of Afghanistan.

For the first time ever, researchers from the World Conservation Society snapped these photos using camera traps. The groups call the endangered snow leopard the world's most elusive big cat. Researchers say there are at most 7,500 left in the wild. That's amazing.

VELSHI: Very cool. Great pictures. They look like they were taken by a photographer.

All right. Still to come this morning, first Mila Kunis and then Justin Timberlake. Now, a third celebrity has been invited to a Marine Corps ball. Any idea who it is?

VELSHI: Also, our question of the day. With talks to raise the debt ceiling essentially in a holding pattern, we want to know: Would not raising the debt ceiling teach America a good lesson about spending? Send us an email, a tweet, or let us know on Facebook and we'll be reading your comments a bit later.

(COMMERCIAL BREAK)

VELSHI: Twenty-two minutes after the hour. Minding your business this morning.

Stock futures currently trading lower ahead of the opening bell. Markets made modest gains on Friday, boosted by corporate earnings. The Dow closed up about 40 points. NASDAQ gained about 30 points. S&P 500 just seven points higher. But all of them ended lower for the week overall.

Investors remain nervous that lawmakers might not be able to reach an agreement on the nation's debt ceiling in time. Sixteen days to go before the Treasury Department says it will not be able to pay all of its bills, pushing the U.S. closer to default.

Some of the world's largest coast will report second-quarter earnings this week, including McDonald's, General Electric and Apple. Others on tap today, Halliburton, Wynn Resorts and toymaker Hasbro. IBM will report its earnings after the closing bell this afternoon.

President Obama expected to nominate Richard Cordray, a former attorney general from Ohio, to head up the new Consumer Protection Bureau today. Many Senate Republicans say they will try block the nomination not just for Cordray but for anyone, saying the new agency lacks transparency and accountability.

Volkswagen on face of a record year. VW says it sold 4 million cars worldwide in first half of this year. That includes not just VW cars but the company's other brands like Audi, luxury lines Bentley and Bugatti.

The government proposing new rules that would require airlines to disclose more details about many flying fees they are charging you. The 16 fees include charges for things like pillows and cut the boarding line. And "Harry Potter" winning big at the box office to final installment of the series shattered the opening weekend record, raking $476 million in worldwide ticket sales. It also now holds the title for the biggest one-day box office making $92 million on Friday.

Don't forget -- For the latest news about your money, check out the all-new CNNMoney.com.

AMERICAN MORNING is back after the break.

(COMMERCIAL BREAK)

STARR: Twenty-seven minutes past hour. A shot of the White House this morning. Washington, D.C., where right now it is mostly cloudy, 74 degrees. And a little bit later today , it's going to be quite hot, mostly sunny and a high of 95.

VELSHI: There is a new commander of U.S. and NATO forces in Afghanistan. General David Petraeus performed his last official act this morning when he handed off the post to Lieutenant General John Allen.

CHETRY: After a military career spanning 37 years, Petraeus is coming home to head up the CIA.

Barbara Starr is live at the Pentagon this morning.

So, how is he being received at the CIA and vice versa? Is he looking forward to this?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, he is taking off that uniform, as you said, after 37 years. He's going to take a couple of weeks off and spend a little time with his family after all these years in the war zone.

And then the plan is actually for him to arrive at the CIA essentially at the beginning of September.

Petraeus is going to have the same challenge there that so many incoming CIA directors have. He's going to have to show that work force he is one of them, that he understands their problems and challenges. And at the CIA the war on terror is shifting. We are seeing a lot of the developments and operations really pick up in places like Yemen and Somalia. But, of course, top concerns always Pakistan and what's going on inside that country, North Korea, and perhaps the number one target, if you will, for gathering intelligence about what they are up to may well be Iran.

The U.S. believes Iran is really trying to extend its influence in both Afghanistan and Iraq and around the world. So, there's going to be a lot of effort over the coming years to see what Iran is up to.

General Petraeus in charge of all of that now as Director Petraeus.

We'll see if he gives up the nickname he's had for so many years since he attended West Point where his cadet, fellow cadet buddies, used to call him Peaches Petraeus -- Ali, Kiran.

VELSHI: Where's the peaches come from?

STARR: Well, you know, guys at the academy, they just sort of make stuff up, don't they?

VELSHI: All right.

STARR: I found out recently that amongst his buddies, his fellow former cadets, many of them now two, three, four-star generals themselves, that name Peaches Petraeus has stuck over the years amongst his close friends, amongst others, maybe behind his back. Not too much to his face. He's often called King David Petraeus.

VELSHI: Well, good thing he is a big tough guy.

CHETRY: He doesn't strike me as a "peaches."

(CROSSTALK)

VELSHI: All right. Barbara, good to see you.

CHETRY: Well, top stories, Rupert Murdoch's top newspaper executive Rebekah Brooks arrested this weekend in a U.K. hacking scandal. She's been released on bail. And British lawmakers say they expected she will still testify tomorrow at a hearing in the House of Commons.

London's top officer, police officer, Paul Stephenson, also resigned yesterday. A hearing on the scandal will be held in London's House of Commons tomorrow.

The FBI is investigating an armed home invasion at the farmhouse of Iowa Congressman Leonard Boswell. The intruder reportedly entered Boswell's home Saturday night and pointed gun at his daughter demanding money.

We are told the 77-year-old Boswell struggled with the gunman before his grandson grabbed the shotgun and pointed it at the intruder who then fled. No one was hurt.

With debt talks between the president and congressional leaders set to resume, we are learning the Senate could vote as early as this week on a scaled-down plan that would allow the government to borrow more money to pay its bills.

Senate aides said the plan would give President Obama the power to raise the debt ceiling by $2.5 trillion, but it would also require three congressional votes on the issue before the 2012 general election. Ali --

VELSHI: All right, the Treasury Department says the U.S. needs to raise the debt ceiling by August 2nd or risk defaulting on its loans. Now if that happens here is how you might be affected.

The stock markets, the dollar, they may plummet. Interest rates could go up. So what do you do to protect your money while they are all trying to work this out in Washington?

Joining me now is Donna Rosato. She's a senior writer for "Money" magazine. Donna, good to see you. You know, different asset classes, when you're talking about stocks, bonds or cash or commodities, they react differently to the same thing.

So while it sounds like an old lesson the first thing you should do is make sure you are diversified.

DONNA ROSATO, SENIOR WRITER, MONEY MAGAZINE: That's right. As you made the point already, you don't want to panic and bail out of your investments altogether, but you are -- diversified if you are concentrate order U.S. stocks you want to make sure you are diversified.

That means be it an international stocks, an emerging markets, but also different asset classes, bonds, commodities, currencies, even cash which can be a safety valve during this time.

VELSHI: You can find out how to do this, by the way, on all sorts of web sites including on money.com. This is a big one. Don't panic. We do the wrong things when we panic. We sell at the wrong time. We buy at the wrong time. What do you suggest the average person does so that they can eliminate this panic?

ROSATO: Well, first of all, keep in mind past history. OK, a lot of people who panic in the 2008, 2009 financial crisis, if they really got out of the stock market, they missed on one of the biggest rallies we have seen the past two years.

So first of all, keep that in mind. Also think about where you are in your investing life. If you are earlier in your investing life, you have time to ride out the volatility that we are probably going to see if there is a debt default.

If you are later, maybe you want to move to cash, if you say within five years of retirement that's going to make a big difference.

VELSHI: The issue is if you bail out, sometimes you don't have the wherewithal to get back in or you miss it. Do a 401(k) checkup. One of the things I have been telling people is just know how to log into your 401(k) or your IRA, or investment account.

Take a look at where you are and whether you are in balance with what you are supposed to be doing?

ROSATO: That's right. Again, there's a lesson. You want to make sure you are diversified. A lot of folks look at their 401(k) statements for a while and what happening with the bull market, this is the time to make sure you are diversified.

Again, among different asset classes and again, if you are close to retirement make sure you are a little bit more conservative. But we all need a mix of cash, commodities, bond, international, U.S. stocks because that really provides stability and when commodities are up, and -- stocks are down, you are going to be able to be balanced that way.

VELSHI: You are less likely to take a big hit if you got a bunch of different things. Talk to me about short term bonds, who is this important for and why?

ROSATO: Well, short-term bonds are less volatile than longer-term bonds. There are less - as you said, if we do have a debt default, you're going to see long-term bond prices drop, which is going to push up interest rates.

But shorter term bonds and corporate bonds are less sensitive to shorter -- sorry, to higher interest rates and inflation as well. So if you are in shorter term, which means in four years or less high grade corporate bonds, this is going to protect you from the interest rate hikes and the inflation risk.

VELSHI: There are great ways to do this. You don't have to do it directly. You can do this through mutual funds and exchange traded funds. There are a lot of them out there that can get you into bonds.

OK, gold, another record for gold. People are obviously moving into gold because they are concerned about the value of the U.S. dollar if there is a default.

ROSATO: You know, people always consider what they call gold safe haven, but it's been on a 10-year bull market run. So, you know, gold is one commodity because it is considered safe that might actually be a place that you can see things going up.

We hit a record just last week again, but you want to be careful on gold. This is not something you should -- you know, have a huge amount in your portfolio probably 5 percent to 10 percent.

But it could balance out things for you and if you really believe that a lot of volatility is ahead, this could be something that could bring stability and growth for you as well.

VELSHI: It is likely to go the other way than the U.S. dollar goes. If you think the dollar weakens, but be careful. When we say stock up, you are right. Stock up to what you should have if you go and figure out what your asset allocation should be.

It will be a good way to do that. By the way, for those of you that want to understand what your asset allocation should be, you can go to cnn.money.com/ali. I've got it right there on the page. You can answer a bunch of questions and it will tell what you your pie chart should look like so stock up on some gold if you don't have any in your portfolio. Don't back up the truck.

ROSATO: That's right. This is not the time to panic, but think about the assets that's need to be in your portfolio.

VELSHI: All right, Donna will be on top of this, by the way, in "Money" magazine with her crew there. Donna Rosato is a senior writer at "Money." A lot of good advice in there about how you can manage your portfolio now and in the case of a debt default. Donna, good to see you. Thanks so much. All right, our question of the day is related to this. Would not raising the debt ceiling as some people are suggesting we do, would not raising the debt ceiling teach America a good lesson about spending?

We want to know what you think. So e-mail us, tweet us, send as a post. Post something on our blog page. We are going to read through some of your answers through the course of the morning.

CHETRY: All right, still ahead. She is known by her stage name "Ruby, the Heart Stealer." Well, today Italian Prime Minister Silvio Berlusconi is facing charges that he paid for sex with a 17-year-old girl at one of his infamous house parties. We have a live report next. It's 36 minutes past the hour.

(COMMERCIAL BREAK)

CHETRY: It's 39 minutes past the hour right now. There were two court hearings that are happening today for Italian Prime Minister Silvio Berlusconi. He did not attend to either one though. He is facing bribery charges and he's also accused of paying for sex with a 17-year-old girl.

VELSHI: Diana Magnay is live in Milan this morning. Diana, Berlusconi is actually involved in three trials in which there are two hearings today.

DIANA MAGNAY, CNN CORRESPONDENT: That's right. No stranger to trials. In fact for the last two decades, there have been numerous hearings and trials looking at allegations of corruption, bribery, embezzlement, and tax fraud relating to his media empire.

This is the first time that he's had to face trial charges on paying an under aged minor for sex and also for having supposedly abused his power by trying to get her out of a theft charge. Placing a phone call to police saying she should be let off.

He says he did not because he thought she was the niece of the then Egyptian President Hosni Mubarak. But these court cases are very serious allegations and last week only, Ali, he was asked to pay $800 million in a fine to a rival media company for corruption charges in his invest company. So some of these charges are coming back to bite him very hard at the moment, Ali.

VELSHI: All right, Diana, we're going to see how this turns out. This case doesn't have a dull moment in it. Diana Magnay for us in Milan.

You mentioned Mubarak, Diana. There has been shake-up in the Egyptian government. It is not clear if it's going to be enough to quiet opposition protests.

Egypt's prime minister is appointing 14 new ministers to his cabinet keeping 13 others in place. They're going to be sworn into office today and former Egyptian President Hosni Mubarak reportedly slipped into a coma yesterday. The hospital tells CNN he has since regained consciousness.

CHETRY: Nelson Mandela turns 93 today. The former South African president was surrounded by family. People around the world have been asked to mark today's occasion by devoting 67 minutes of their time to work in their community, do something towards the greater good. That's one minute for every year of Mandela's public service.

VELSHI: You were saying it is stuff that sort of reflects Mandela's priorities.

CHETRY: Get tested for HIV, talk to your friends about safe sex. Do something that helps people in your community.

VELSHI: Yes, it's good idea. Not to be outdone by his friends with benefits co-star Mila Kunis, Justin Timberlake will also attend a Marine Corps ball. He's accepted the invitation to accompany Marine Corporal Kelsey Desantis to the event in Washington, D.C.

She posted a YouTube video asking J.T. to be her date after Kunis accepted a request from a fellow Marine. Timberlake says, he's very flattered by the invitation. He says he doesn't get invited to things a lot.

CHETRY: He said something about because she is a mixed martial artist maybe they could tussle and then he goes, I was joking about that.

VELSHI: That's right.

CHETRY: He doesn't butt kicked at the Marine Ball. Well, it doesn't end there, another celebrity getting a video invite. This one is for Betty White, the one and only. Check it out.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I would like to take Betty White. She's just funny and is -- sweet. She is mature. She's the all-around perfect woman.

(END VIDEO CLIP)

CHETRY: Sergeant Ray Lewis, veteran of Iraq and Afghanistan and also an inspiring rapper would like to accompany Betty White if she accepts.

VELSHI: A major cleanup under way this morning in Canada after this happened. Take a look at this, a severe storm causing a concert stage to collapse during - whoa, during the Annual Ottawa Blue Fest. This YouTube video was seen the first time capturing the chaos, people running for their lives.

CHETRY: Then cheap trick performing at the time, remarkably there were no injuries to the performers. I believe one spectator had some injuries, though.

VELSHI: Right. Morning headlines next. Plus, toning shoes, you know the sneakers that promise to exercise and tighten muscles in your calves, thighs and butts? Do they really work?

CHETRY: That sounds too good to be true. Now, there are also some concerns about them. So we are going to talk about that. Also, is it OK to let your toddler sleep in the same bed as you? Details on a new study out about it. Elizabeth Cohen joins us coming up. It is 43 minutes past the hour.

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CHETRY: It's 45 minutes past the hour. We're look at your headlines this morning. Rupert Murdoch's top newspaper executive, Rebekah Brooks is now out on bail. She was arrested over the weekend in the U.K.'s growing phone hacking scandal. London's police commissioner, Paul Stevenson, also resigned yesterday.

Casey Anthony is out of jail and for the moment at least, out of the spotlight. The attorney for Casey's parents, George and Cindy Anthony, say that they refused a request to act as media decoys when their daughter was released from jail yesterday. Casey Anthony was driven away by her defense team and remains in hiding.

Congressman Leonard Boswell is OK after an armed home invasion this Iowa farmhouse. The 77-year-old Boswell reportedly struggled with the gunman Saturday night before his grandson grabbed a shotgun and pointed it at the intruder who then fled. Obviously, police still are on the hunt for that home invasion intruder.

The Senate could vote as early as this week on a scaled-down plan allowing President Obama to raise the nation's debt ceiling. Lawmakers have just 16 days left to strike a deal and after that, Treasury Department says that the U.S. will begin defaulting on its loans.

Stock futures currently trading lower ahead of the opening bell this morning as uncertainty runs high over the debt ceiling talks. Investors also hoping strong corporate earnings this week will give the markets a boost as they did towards the end of last week.

A scorching summer heat wave is baking the Midwest. Now the dangerously hot temperatures are moving to the east coast. It is the worst heat wave in years in many places already causing hundreds of health emergencies.

And the second tropical storm of the season has formed and is now growing stronger. Tropical Storm Bret is swirling in the Atlantic Ocean. It's not expected to hit the U.S., but it could bring some heavy rain to the Bahamas.

The final Harry Potter film "Deathly Hallows Part 2" setting new Box Office records with its opening weekend take of more than $168 million. It sold more tickets for midnight showing than any other movie in history. It had the best ever single day gross on Friday. The U.S. suffered a stunning loss to Japan in the Women's World Cup final yesterday. Japan won its first title in a nail-biting penalty kick shoot-out. It was a victory for a nation that's still (inaudible) from the earthquake and tsunami.

You are caught up on today's headlines. AMERICAN MORNING is back after the break.

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VELSHI: Beautiful Atlanta skyline, 71 degrees and sunny right there. It's going to be mostly sunny for the rest of the day. Getting a little hotter as you might expect. Getting up to 89 degrees today.

CHETRY: Well, there are some doubts this morning about the effectiveness of those muscle toning shoes. They are sometimes marketed as wellness shoes, rocker bottom soles are supposed to help improve muscle strength and posture while burning calories and eliminating pain.

But the American Council of Exercise says that they are not a magic solution. The American Academy of Podiatric and Sports Medicine calls the advertised benefits of the shoes greatly overstated. People are lulled into falsely thinking that just because they are wearing them somehow --

VELSHI: They're getting exercise strengthening. Next time you eat out, ask for a bigger fork. Researchers just studied the eating habits of customers at an Italian restaurant chain in the southwest.

Some of them got big forks and others got small ones. Those with the big forks ate less. The study concludes that people using small forks may feel they are making less progress towards their goal of finishing the meal so they overcompensate by eating more. The --

CHETRY: Do you buy this? We are talking about Italian food and showing some sort of breakfast buffet with grits. But you know what --

VELSHI: It's macaroni. OK, do I buy that? I don't know. I mean, I'm bothered by really big forks. You know, sometimes you go to places and give you really big --

CHETRY: Very large. They also say that if you put a smaller plate, you will eat more than a bigger plate.

VELSHI: Is that right?

CHETRY: Yes. That if you put your food on a smaller plate as opposed to a bigger plate, I don't know. You have to somehow find a way to keep your portions under control. Your mother probably warned you not to do it.

But is there anything really wrong with allowing your toddler to sleep in bed with you? VELSHI: A new study has some answers, senior medical correspondent Elizabeth Cohen join us live now from the CNN Center in Atlanta. Tell us the truth, Elizabeth.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: You know, Ali, I think you mentioned, you know, moms. I think a lot of people in the older generation say if you let your toddler sleep with you, you're going to end up with a mama's boy or mama's girl.

They're going to get overly dependent on you and this study says look, we looked at these toddlers who slept with their parents and they were fine. They didn't have any behavioral problems, any more so than other kids.

They weren't any different than other kids. So you can rest easy if you're sleeping with your toddler. You're not going to turn them into some kind of monster.

CHETRY: We are specifically talking about toddlers because we know that we've been warn about the dangers of sleeping with newborns, some of the concerns that you could roll over, the child could smother?

COHEN: Right. I want to make that very clear. This study looked at kids ages 1 through 3. The American Academy of Pediatrics is very clear. Do not sleep with your child under the age of 1, higher risk of SIDS, higher risk of rolling over and smothering your baby so that - there is no question there. Do not sleep with your baby under the age of 1.

VELSHI: And nursing moms who occasionally fall asleep while nursing their babies, is that OK?

COHEN: Yes, I do have to say that when the American Academy of Pediatrics came out with that recommendation saying don't sleep with your little baby, I thought I've been guilty of that before, you know, while nursing my children. We would both fall asleep in the same bed.

So we asked a pediatrician about that. She said, look, we know that moms do that sometimes. It's just sort of part of being a nursing mother. If you sort of do that occasionally or you do that for a short period of time, it's nothing to get freaked out about.

But as soon as that baby is done nursing, get that baby into a crib. There are these wonderful sort of co-sleeper things that you can put next to the bed like bassinets. They can be right next to you, but at least they're in their own bed and not a place where you can roll over on them.

CHETRY: Now, one thing they didn't address, which I thought that was interesting, is the whole way that the family gets thrown off. I mean, the husband and wife, being able to have your own bed, have some time away from the kids and just be able to have a private space. Do they talk about whether or not, mentally -- mental health wise it's important to have your kids in a separate room?

COHEN: You know, they didn't mention that. I'm with you. I mean, I certainly -- I'm not a family bed kind of gal. I mean, that never worked for my family. I do have friends who did that.

I mean, they had a family bed and their children, over the age of 1, slept with them. I don't know when they found time to be intimate. I didn't ask them that question, but I agree with you. I think that it's a difficult thing, but I do know some parents, some families love it and make it work.

CHETRY: All right. I mean, to each his own.

COHEN: Right.

CHETRY: I wasn't even just talking about the intimacy, but sometimes just to be able to sleep.

COHEN: Sorry. I just went there, didn't I?

CHETRY: That's OK. I hear what you're saying. All right, Elizabeth, thank you.

COHEN: Thanks.

CHETRY: TMI for Ali. Sorry.

VELSHI: I'm enjoying the conversation. Learning a lot.

CHETRY: If you want to keep your kids safe in the car, let grandma or grandpa drive. Researchers from the University of Pennsylvania say that even though grandparents are at a higher risk for serious accidents.

But kids driven by their grandparents suffered fewer injuries in crashes and actually safer than children being driven by their parents. This was true even though grandparents were less likely make kids wear their seatbelts.

VELSHI: I would imagine that, you know, when it's your kid, you're driving and you're doing a billion things and you're running errands. Grandparents are taking you for ice cream, dropping you off somewhere. It's sort of their main objective.

CHETRY: Exactly.

VELSHI: All right, our question of the day. Just 16 days and counting, debt deadline is coming up. The government may not be able to pay its bills. The president and congressional leaders are expected to meet again this week. So we want to know, would not raising the debt ceiling teach America a good lesson about spending? Here are some of your responses.

CHETRY: Alessandro writes on Facebook, "How would it teach us a lesson? Due to the recession, virtually everyone has changed their spending habits so as to live within their means, except Congress, that is. Raising the debt ceiling simply tells people there are no consequences to borrowing with reckless abandon."

VELSHI: So, Alessandro agrees that it would teach us a lesson and yet, Alessandro starts with it wouldn't. And on Twitter, we got this, at what cost? It's like throwing my kid off the roof to show them that it would hurt. Creative responses we're getting from you guys.

CHETRY: Yes, a lot of people weighing in this morning. All right, we're going to take a quick break. It's 6 minutes at the top of the hour. We'll have your top stories coming up.

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