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American Morning
Markets React to Debt Talks; Norway Terror Suspect in Court; Wedding Bells Ring in New York; DSK Accuser Breaks Her Silence
Aired July 25, 2011 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN ANCHOR: Good morning, Ali. I'm Christine Romans. No deal.
Efforts to reach an agreement on the debt crisis failed over the weekend. Now markets around the world are falling. This will have a direct effect on your 401(k).
ALI VELSHI, CNN ANCHOR: And I'm Ali Velshi. The Norway terror suspect who admits killing 93 people on Friday is expected to appear in court in the next hour. His lawyer says he'll explain himself. Little comfort to a grieving nation that is trying to make sense of a massacre, on this AMERICAN MORNING.
ROMANS: Good morning. It is Monday, July 25th. This is AMERICAN MORNING. A lot going on. Let's get you right to it.
VELSHI: Glad you're back. It has been a very, very busy news time while you've been gone.
ROMANS: It sure has. And they solved the debt crisis while I was away.
VELSHI: Yes. Not exactly.
ROMANS: No.
VELSHI: Close, I hope. A new and powerful force is now entering the debt ceiling debate. And as Christine just said, it's the financial markets.
ROMANS: The most important really at this point.
VELSHI: That's right. That's what it's about. The markets are down overseas. In Hong Kong and Japan, they closed down as efforts to reach an agreement in Washington over the weekend failed. And this morning, with just eight days left until Washington may no longer have all of its bills paid, time is running out for Congress to strike a deal.
Dan Lothian live at the White House. Dan, where are the two sides on this issue this morning?
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, you know, they still can't find any compromise as you pointed out. They worked over the weekend. Congressional leaders meeting with the president here at the White House. The hope had been that they could at least come together and have some framework of a plan so that it would not impact the global markets and certainly would not impact Wall Street. But of course that did not happen.
We know that Senate Majority Leader Harry Reid is looking at some kind of a plan that would raise the debt ceiling through the end of 2012 and have cuts of $2.7 trillion. Mr. Boehner, Speaker Boehner, wants any kind of deal to stick to somewhat of the framework of cut, cap and balance. Of course, that is something that was rejected by the Senate. Nonetheless, he remains optimistic that a deal will get done to raise the debt ceiling in time.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: I was born with a glass half full. I'm the optimist. And it's about trying to find common ground. Yes, I understand the president feels that, you know, we need a bigger government and more spending here in Washington. I believe allowing the American people to keep more of that money is the best way to create jobs and grow our economy. But having said the fact that we're on -- it's almost like we come from two different planets. My job on behalf of the country is to find as much common ground as we can to help move the country ahead.
(END VIDEO CLIP)
LOTHIAN: Now, Ali, as you know, this is also campaign season. The president has been doing a number of fund-raisers. He had two fund-raisers planned for the Washington, D.C., area tonight. But a campaign official confirmed last night that those two events will be canceled so that the president can focus on getting this whole debt ceiling issue resolved.
ROMANS: You know, Dan, and this has been a slow motion crisis --
LOTHIAN: It has.
ROMANS: -- because you look back in January, the treasury secretary said, hey, we have to get something done. May 16th is the deadline. May 16th comes and goes.
VELSHI: Yes.
ROMANS: Treasury has to pull all these crazy strings to make sure that we're not in default. And they said we've got until August 2nd. I mean, they've got to pass something big and get it implemented quickly if we're not going to blow right past that anyway.
LOTHIAN: They really do. And you heard Secretary Geithner yesterday saying that essentially we're running out of runway now and this is something that everyone has been dealing with for many, many months. What Speaker Boehner, according to one Republican source, told GOP lawmakers yesterday, is that they have to vote on some kind of a plan by Wednesday and they have to post it on-line by today. So, you know, these are pretty tight deadlines that they're up against right now and at last check, you know, they're still not close on a deal yet. But nonetheless, they have to get something done as he pointed out by Wednesday to meet in order to meet that August 2nd deadline.
ROMANS: Yes. They don't have to be tight deadlines.
VELSHI: Never has to be tight deadlines.
ROMANS: You know, this is like -- this is a crisis made in Washington.
VELSHI: But as Mark Preston told me about half an hour ago, on the phone, he said guys, it's Washington. That's --
LOTHIAN: This is how it always works.
VELSHI: That's what they do. Dan, we'll be with you.
LOTHIAN: That's right.
VELSHI: I'm sure we'll be talking many, many times.
Christine, I have to tell you, Grover Norquist, the president of the Americans for tax reform said to me the other day, it's Timothy Geithner's fault for saying before May 16th that he could shuffle things around until August 2nd and thereby providing the, you know, the idea that maybe this is fungible. Maybe it's not as serious as it actually is.
ROMANS: They've been saying it's serious for a very long time.
VELSHI: It's serious.
ROMANS: And we have been reporting on America spending beyond its means for years.
VELSHI: Yes. As you said, going to start affecting your 401(k) this very week.
ROMANS: That's right.
All right. As we mentioned, President Obama is calling for a $1.24 trillion increase to the debt ceiling. On yesterday's State of the Union, Treasury Secretary Tim Geithner explained why anything less is simply unacceptable.
(BEGIN VIDEO CLIP)
TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: What we cannot do, and this is very important, what we cannot do because it would be irresponsible, is to leave the threat of default hanging over the American economy for a longer period of time. Look, you know, back in January more than seven months ago, we started this process of working with the Congress to get them to raise the debt limit so we can avoid a default crisis. It's taken us seven months to get to the place we're at now. We're almost out of runway. We're not nowhere, but we're almost at a runway.
(END VIDEO CLIP)
ROMANS: Even if lawmakers settle on a plan, it will take days to move it through Congress and to the president's desk.
VELSHI: Which is why they're saying they want something on-line today, voted on on Wednesday.
ROMANS: Is that even possible? Putting something online today?
VELSHI: Even that.
ROMANS: I mean, they would --
VELSHI: This is where -- we're now talking about record time. The president has canceled those fund-raisers. Everybody has got to get their nose to the grindstone.
ROMANS: They don't agree. But they don't agree.
VELSHI: That's totally right.
By the way, we're going to put this to you, what -- who's to blame for this debt gridlock? Send us an e-mail, a tweet, tell us on Facebook. It's our question of the day. Who is to blame for this budget gridlock?
There is how you get hold of us. We want to know what you think.
ROMANS: All right. Now to the gruesome terror attacks in Norway that killed at least 93 people. The suspect, 32-year-old Anders Behring Breivik is expected to appear in an Oslo courtroom today. His lawyer says he plans to explain himself, that he believes the massacre was, quote, "horrible but necessary."
VELSHI: "Horrible but necessary." By the way, he's written a lot about this. It almost has Unabomber-esque, you know, stuff connected to it. He's written manifestos as it were.
On Friday, he allegedly set off a bomb near some government buildings, killing seven people. Then police say he traveled 20 miles to an island youth camp in Utoya, Norway, went on a shooting spree there, killing 86 more people in a bloody ambush.
ROMANS: Diana Magnay is live in Utoya this morning. We understand, Diana, everyone in Norway just observed a minute of silence. Can you tell us what's happening now?
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Hi, Christine. Yes, well, you can see just behind me, before that minute of silence, people have come here to the shores of the lake where Utoya is just to pay their respects and to place flowers. As you say, Anders Behring Breivik will be appearing in court in a couple of hour's time.
It's a very controversial hearing here in Norway because a lot of people are saying this is exactly what he wanted. For him, this was just the beginning. He's got the publicity that he wanted through this horrific massacre and now he has a platform for which to sort of expound his far right extremist views. And those are views which really detail a hatred of multiculturalism, a hatred of the Islamization of Europe, and really blaming European politicians for allowing Muslim immigrants into the continent. So that pretty much sums up his philosophy.
There's a Facebook page with already around 50,000 people asking that the hearing not be made open to the press. The police have said they want it to be a closed hearing so we will have to wait and see what the court actually decides.
Now, he has confessed to both attacks, but he is going to plead not guilty, probably precisely because he wants this to go to trial. He wants an opportunity to make his opinions heard. And you know what, Christine, the maximum sentence that he could get under Norwegian law is apparently 21 years, but there is a possibility for extremely serious crimes but after that it goes into some kind of custody system whereby he could be kept in jail for the rest of his life, although that hasn't yet happened under Norwegian law, Christine.
VELSHI: Diana, I just mentioned at the beginning of this, that it has shades of the Unabomber in the U.S. in terms of lots and lots of writing, postings, information. This guy didn't come out of the blue. He has some very, very strong opinions and they've -- the police are examining a 1,500 page manifesto. What do they know about this?
MAGNAY: Yes. Well, this document was published, the police say, on the day that Breivik carried out the attacks. So on Friday, as you say it's 1,500 pages long, it took him nine years to write. It says in large chunks of it are listed from the Unabomber's manifesto, although without citation. And basically if you remove the word "leftist" that the Unabomber put in his manifesto and replace it with cultural Marxism, which was Breivik's real biggest bug bear, then there are huge similarities. But yes, this is a manifesto detailing some very scary right wing thinking, Ali.
VELSHI: Diana, thanks for that. Sad, sad story to have to cover but thank you for that from you and our team there.
ROMANS: And a minute of silence just observed in Oslo and the entire country of Norway.
VELSHI: Yes.
ROMANS: So we'll follow that as we continue today.
Meanwhile, four teenagers have been badly mauled by a brown bear and her bear cub. This is deep in Alaska. It happened Saturday night at Talkeetna, deep in the wilderness about two hours north of Anchorage. The teens were in the 24th day of a month-long backpacking survival course, 24th day, and then they were attacked.
VELSHI: Wow.
ROMANS: They're all in critical condition. Two of these kids facing life-threatening injuries from this attack.
VELSHI: Also this morning, an autopsy to determine what killed singer Amy Winehouse could take place as early as today. The 27-year- old's publicist and friend tells Britain's "The Sun" newspaper, Winehouse died alone in her bed. Many are speculating that her death is connected to her well chronicled substance abuse. In the meantime, mementos from mourners continue to pile up outside her London apartment.
ROMANS: A string of suspicious fires in California over the weekend. Police are searching for an arsonist they believe set as many as 18 fires in North Hollywood. The fires began in cars but then quickly spread to nearby buildings. Police say no one has been hurt.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: By the laws of the state of New York, I now pronounce you married. You may seal your vows with a kiss.
(END VIDEO CLIP)
VELSHI: And the wedding bells have been ringing nonstop since same-sex couples could legally marry in New York State. The law took effect yesterday.
You're looking at the first couple to marry in New York City. Phyllis Siegal and Connie Kopelov. They tied the knot at city clerk's office as a crowd of onlookers cheered.
(BEGIN VIDEO CLIP)
PHYLLIS SIEGAL, FIRST COUPLE TO MARRY IN NEW YORK CITY: It was just so amazing. It's the only way I can describe it. I lost my breath and a few tears. And it's indescribable.
(END VIDEO CLIP)
VELSHI: And a handful of protesters gathered across the state claiming Governor Cuomo redefined marriage without giving voters any input into it.
All right. Coming up next, the hotel maid who claimed she was sexually assaulted by former IMF Chief Dominique Strauss-Kahn speaking out for the first time. Her account of the incident straight ahead.
ROMANS: Plus, why this California man, why he grabbed on to a moving car and --
VELSHI: Oh.
ROMANS: -- oh, wouldn't let go. We'll tell you what happened. That's next on AMERICAN MORNING.
(COMMERCIAL BREAK)
ROMANS: Good morning. Welcome back to AMERICAN MORNING.
"He was acting like a crazy man." Those are the words from the New York City hotel maid that claims former IMF Chief Dominique Strauss-Kahn sexually assaulted her.
VELSHI: Now, for the first time since the May incident, the 32- year-old accuser is coming forward with her side of the story. This is video of an interview she gave to ABC News. She also discussed the alleged attack with "Newsweek" magazine. She said she never wanted to go public, but now she feels she has no choice.
Susan Candiotti joining us this morning with this new development. Good morning, Susan.
SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Good morning.
And she lays it all out in her own words, and from what we understand it seems to match what she has told police, what we've heard from sources, as well as her own attorney. Her name is -- is this, it's Nafissatou Diallo and we are publicly now revealing her name because she herself has come forward, otherwise normally we would not do this for someone who says she's a sexual assault victim.
Here's what we are hearing that she is saying about her account. That she went into the hotel room, she thought no one was in there, and then she said she was confronted by a naked man who came at her.
And this excerpt from "Newsweek" magazine, she says that she said to him, "Oh, my God. I'm so sorry." He says, "You don't have to be sorry." He says, "You're beautiful." She is saying that he attempts to attack her at this time. She says to him, "Sir, stop this. I don't want to lose my job." He says, "You're not going to lose your job."
Now, remember that police have said all along that they have found forensic evidence of a sexual encounter in the room and there seems to be very little dispute about that. We have -- he -- Dominique Strauss-Kahn has not told his story. He has pleaded not guilty, as you'll recall, and he says he will never plead guilty to anything that this woman has said that he has done.
ROMANS: And so now, this has all sparked this sort of war back and forth between the two attorney camps, hasn't it?
CANDIOTTI: That's right. Exactly.
And the other thing as well, too, before we get into that war of words, is that she also told ABC News, quote, "I want him to know that there is some places where you cannot use your money, you cannot use your power when you do something like this."
Now, the district attorney is not -- is saying that they have no comment about any of this. Of course, this is highly unusual. Those lawyers are going back and forth. The lawyers for Dominique Strauss-Kahn immediately shot out a statement when they heard about this interview and they said in part, quote, "The number of rallies, press conferences and media events they have orchestrated is exceeded only by the number of lies and misstatements she has made to law enforcement, friends, medical professionals and reporters."
Well, the lawyers for the maid immediately shot back and said, "Oh, really?" In their words, they are defense attorneys and clearly believe that these types of false personal attacks are part of their job description. But that excuse isn't sufficient when we are dealing with a brutal sexual attack, a mountain of physical evidence, a victim who spoke out immediately and numerous corroborating witnesses.
So, again, this is remarkable, the fact that she has come forward, especially since the prosecutors have not yet made their final decision.
VELSHI: Right. And so, is this meant -- do we think this is meant to be influencing the prosecutors to carry on with the prosecution?
CANDIOTTI: Oh, sure.
VELSHI: Which is what Dominique Strauss-Kahn's lawyers are saying or are they setting the ground for a civil suit.
CANDIOTTI: Well, they've clearly indicated that they're going to sue him civilly --
VELSHI: Right.
CANDIOTTI: No doubt about that. In fact, they've already filed a lawsuit against "The New York Post" for alleging that she is a prostitute, which she has denied.
Now, we'll have to see what happens next, but clearly, prosecutors are moving forward. As a matter of fact, last week alone they interviewed the lawyer of a French woman who has already filed a formal complaint in France alleging that Dominique Strauss-Kahn attacked her years ago. And there are moves under way now to bring that woman to the United States, so that prosecutors can interview her before they make a final decision about whether to move forward.
VELSHI: Right.
ROMANS: Still a story of her credibility and his reputation --
VELSHI: Yes.
ROMANS: -- and both of them colliding in a very high profile --
CANDIOTTI: Exactly.
ROMANS: All right. Susan Candiotti.
VELSHI: Susan, thanks.
CANDIOTTI: You're welcome.
ROMANS: In the 8:00 hour of AMERICAN MORNING, Christopher Dickey will join us. He's the Paris Bureau Chief and Mideast editor of "Newsweek" Magazine. He interviewed Diallo for the "Newsweek" cover story. We're going to get his impressions of DSK's accuser.
VELSHI: Meanwhile, we would like to get your impressions of this. Check this out. You do not see this every day. A local -- look at this. There's a man hanging out of a car, a car that's speeding along. A local TV cameraman in Stockton, California, was preparing for a live report on Friday morning, when this car drove by him with a man being dragged from the passenger window about 35 miles an hour. Police say the man mistakenly thought a friend's purse was inside the car and he was determined to get it back. I'm assuming the car was being stolen?
ROMANS: I don't know.
VELSHI: Nobody was hurt.
ROMANS: That's a long way to go for a purse.
VELSHI: That is a long way for a purse.
ROMANS: You can just cancel the -- cancel the credit cards.
VELSHI: You can call and cancel the credit cards. Yes. No charges were filed. But nobody hurt. That's the fascinating part.
ROMANS: Yes, at 35 miles an hour.
VELSHI: I'm going to find out whether -- whether he believes that car is being stolen.
ROMANS: Right. Or why he thought a purse was in there.
VELSHI: Why he thought -- yes.
ROMANS: All right.
It was Chicago's wettest day ever. I know that all of my friends and my sister-in-law were checking their basements. That's for sure. Firefighters on boat pulling people from stranded cars after close to seven inches of rain fell --
VELSHI: Wow.
ROMANS: -- in just a matter of hours on Saturday. It came down so fast, sewers backed up, highways shut down. Some train service was suspended. I was there. It felt like it was just, Rob, it felt like it was a huge thunderstorm that had just stopped over Chicago --
VELSHI: Yes. It was move --
ROMANS: -- and kept churning in circles. Unbelievable.
VELSHI: Wow.
ROMANS: Rob Marciano is in the Extreme Weather Center with us. A very wet day in Chicagoland.
ROB MARCIANO, AMS METEOROLOGIST: It was kind of a stalled front over that area and the thunderstorms just training over the same site one after the other. That front now slowly moving off towards to the east and as it does so, we wouldn't see storms that probably produce seven inches like it did in Chicago, but produce some heavy downpours at times as this humidity that's built up over the past, really, couple weeks with the heat wave, obviously got wrung out of the atmosphere quite rapidly across the Chicagoland area.
Speaking of heat, here are the record highs from yesterday. A little bit of a shorter list but nonetheless still hot -- 100 in Atlantic City; it was 100 in Wilmington, North Carolina, and Philadelphia, seeing 98 degrees. Since then a little cool front has slipped through and they'll see another cold front come through as well as we go to the next couple days.
But, Dallas to Oklahoma City, the South Central Plains, continue to sizzle. Dallas is well over 20 days now in a row of 100 degree plus temperatures and today they'll be up to at least 106 degrees.
So if you want to cool off, go out west. The last official day of skiing for Boreal (ph) Ski Resort there just outside of Lake Tahoe. Boy, they really had to scrape to get the snow on this one -- this one trail, but they did it and the last day of skiing was over the weekend. Heck, you know, it's almost September. We'll be reopening those slopes here before too long. Nonetheless, one of the longest ski --
ROMANS: Can you bet Rob was talking about skiing --
VELSHI: Rob is -- I'm betting his out there (ph).
ROMANS: -- (INAUDIBLE) Fourth of July.
VELSHI: Rob -- he can always find us a last day. I'm surprised he's not there doing it.
MARCIANO: I was surprised that they were -- they were still open. I thought at July 4th everyone pretty much shut down and, you know, congratulated everybody, but apparently Boreal kept it going for another couple of weeks.
VELSHI: All right. Rob, thank you for that.
ROMANS: It really hurts when you wipe out in daisy dukes, so --
VELSHI: Yes.
ROMANS: Thanks, Rob.
All right. New hope for Amanda Knox's murder appeal. Two forensic experts now rejecting key DNA evidence used to convict her. We'll have those details coming up.
It's 23 minutes after the hour.
(COMMERCIAL BREAK)
ROMANS: "Minding Your Business" this morning.
Lots to talk about this week on Wall Street. U.S. markets poised to open sharply lower this morning, Dow futures are down right now more than 100 points. At one point this morning in pre-market, futures trading, NASDAQ and S&P 500 futures are also down so far. Why? Well, the debt clock is ticking and lawmakers in Washington still have not reached an agreement to raise the nation's debt ceiling and get our debt under control. We're beginning to see the effects of that uncertainty in world markets.
Stocks in China and Japan closed lower. European stocks are also down this morning.
And Moody's dealing another blow to Greece, downgrading its debt yet again. That's also pushing European markets and U.S. stock futures lower. The ratings agency forecast that Greece will have to default on some of its debt despite the European Union approving another bailout for that country last week.
Investors also have to sort through more corporate earnings reports this week. Today, Texas Instruments and Netflix report their earnings for the most recent quarter, this after the closing bell. Big oil companies, Exxon Mobil and Chevron are expected to report very big profits for the second quarter. That will come later this week.
Investors are also waiting for the first official reading on the nation's economic growth for this most recent quarter. Right now, economists forecast that growth actually slowed down to about 1.6 percent. The recovery, perhaps, losing some steam. Those GDP numbers will be released on Friday.
And gas prices are trending up again. The latest Lundberg Survey says recent high oil prices are pushing gas prices up nationwide. The current national average for a gallon of regular $3.59.
AMERICAN MORNING will be right back right after this break.
(COMMERCIAL BREAK)
VELSHI: Thirty-one minutes after the hour. That means it's time for top stories.
President Obama canceling two fund-raising appearances today after talks to resolve the nation's debt ceiling crisis went nowhere over the weekend. Failed talks have left both sides pursuing separate plans. And this as investors on Wall Street and overseas worried.
In a moment, we'll go live to London and Hong Kong for the latest in financial markets.
A minute of silence throughout Norway this hour as massacre suspect Anders Breivik prepared to appear in court in Oslo this morning. It's going to happen in the next 30 minutes or so. His attorneys say Breivik will explain himself. His client believes the massacre was, quote, "horrible but necessary," end quote.
On Friday, Breivik admitted setting off a bomb near some government buildings, killing seven people. And then police say he traveled 20 miles to an island youth camp and went on a shooting spree, killing at least 86 more people.
And the New York City hotel maid who claims former IMF chief, Dominique Strauss-Kahn, sexually assaulted her is speaking out. Thirty-two-year-old Nafissatou Diallo in an interview with "Newsweek" magazine and ABC news saying, quote, "I want justice. I want him to go to jail. I want him to know you cannot use your money, you cannot use your power, when you do something like this," end quote.
ROMANS: As Ali just mentioned, if you have a 401(k), maybe an IRA, you might be paying the price for Washington's inability to reach a deal on raising the debt ceiling. Right now, markets overseas are down. Stock futures here in the U.S. also are in negative territory.
Manisha Tank is live in Hong Kong, and Nina Dos Santos is live in London.
Let's start with Manisha first.
I mean, all weekend, even in Washington, Manisha, people who are negotiating this thing were saying, wow, we got to -- we got to keep a close eye on what happens in Asia. The markets are now a participant in this debt drama, aren't they?
MANISHA TANK, CNN INTERNATIONAL CORRESPONDENT: Yes. They very much are. Some of the -- the highest number of the U.S. treasury holders in the world, really, the Asian investors. They've been watching this. They wanted to wake up Monday morning and see that there was a deal. No deal.
So, what was the reaction on the markets? That's the important point. Actually, it was quite muted and we had some domestic news around the region that probably had more of an impact on some stock markets like in Shanghai, for example.
But, in Japan, we had an interesting reaction -- down about 0.8 percent by the close for the index itself. But there are few stocks there that really were indicative of some of the concerns that people here have about the credibility of the U.S. economy as a whole right now and people punching that word around "downgrade," what happens if there is a downgrade? No matter what happens of U.S. debt, what are the implications?
So, we had Toyota, as one example, down 1.5 percent, and Honda, which sells some 44 percent of its cars to the North American market, also under pressure. It's really a wait and see mode over here in Asia right now.
But let's cross over to Nina Dos Santos in London for a view of how European markets are responding to this debt crisis.
NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: Yes, Manisha, whether it's a default first or downgrade first, that's what investors are primarily focused on here on this side of the Atlantic.
Broadly speaking, stock markets started the day in negative territory. Some of them have regained ground. FTSE 100 up just a tad, as we speak. But the bond market is also suffering and the euro is up against the U.S. dollar. Currency -wise all of this is because, obviously, the United States is enormously important trading partner for this European block. It's also a hugely important reserve currency. That's why everybody is so worried.
We do have one bright spot in the market. It's gold, the ultimate safe haven. It's been rising to yet another record, $1,624 an ounce and rising.
Christine and Ali, back over to you.
ROMANS: Yes. Of course, that bright spot is just a reminder of how dire people are about other things that they're looking for that safety in gold.
Manisha and Nina, thank you so much. And, Ali, I mean, here we go. I mean, it's unpredictable how markets will react. That's the other thing. The people that I've talked to and talked to for years in the market say they can't really say exactly what's going to happen. They know that you can't mess around with America's credit.
VELSHI: Let's just remind our viewers on one thing. Some things are unpredictable. First, it's unpredictable as to how bond yields will go.
ROMANS: Exactly.
VELSHI: Some people say interest rates will shoot up if there's a default. Others say it might not. If there's a downgrade, interest rates may shoot up, may not.
Stock market will only respond negatively.
ROMANS: Right.
VELSHI: So, there's not a lot of doubt.
ROMANS: And the dollar could get hit. I mean, people know that there could be wild, unpredictable and bad reactions. Just what that mix of reaction in the market is unclear.
VELSHI: Right. CNNMoney.com is doing a lot of stuff today and this week on what you should do specifically with your money to prepare for the lack of a deal if there isn't one by the end of this week.
ROMANS: That's right.
VELSHI: We'll stay on this story.
More on the massacre in Norway -- an announcement, just moments ago, about today's court hearing for the suspect.
CHETRY: That's right. CNN's Michael Holmes joins us live from Oslo this morning.
Good morning, Michael.
MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: Good morning, Christine, Ali.
Yes. We just in the last few minutes had some news handed down to us here at the courthouse. We are expecting Anders Breivik to appear here in the next hour or so. The time wasn't fully set. There's been a debate going about whether the media would be allowed in there, Norway being a very open sort of society, it was expected that they would be.
However, the police have asked the court to close the court to the public and the media because they fear that Breivik might send a message. He has said to his own lawyer that he wanted to speak today and, quote, "explain himself," end quote.
Well, we've just heard the court is, indeed, going to be closed to the media and to the public, so we won't know what goes on in there until after it's over. It's essentially a bail hearing, if you like, and he was going to be given the opportunity to say whether he was, in fact, guilty of these crimes or not.
But, at the moment, we've been told that there will be no coverage. We were expecting a live signal out of there, not going to happen at the moment, guys.
VELSHI: Michael, in this grief that Norwegians are feeling jointly, they're finding a bit of a new hero this morning. Tell us about that.
HOLMES: Yes. A guy called Kaspar, he was a fellow we went with yesterday out on to the waters near lake -- near the island of Utoya where this massacre took place. He's one of several locals who were at home, vacation area up there, vacation time here in Norway, and he was in his home and got a call from his friend who said the shooting was going on on the island, and he jumped into a boat with several other locals in their boats as well and they headed straight to the island while the shooting was still going on.
He was extraordinary. He got a bunch of kids off the island who were terrified and under direct threat. Here's part of what he had to tell me.
(BEGIN VIDEO CLIP)
HOLMES: It's not a huge boat. How many people did you put in here?
KASPAR ILGAUD, RESCUED CHILDREN FROM UTOYA ISLAND: The first round I believe it was 14.
HOMES: Fourteen?
ILGAUD: Yes. Then I had to address the oldest one of the four left and said, you have to stay ashore. I promise I will come back and get you. And they respected that. And I said, sit down and wait. Went to the mainland and went back again and there were -- agreed upon sitting there and I just waved to them like this and they waved back, and we made contact and got them in the boat.
(END VIDEO CLIP)
HOLMES: Yes. Extraordinary tales that he was telling me, Ali and Christine. I mean, one of them was that you heard him say, waving to people, he waved to a group of three kids sheltering behind some rocks and they didn't wave back. He thought they were terrified. He came back on a second trip, did three in all, tried to make contact with the kids again, and it was then he realized, in fact, they were dead, all three had been shot to death.
And, you know, tragic stuff indeed, unfolding here in Norway -- Ali, Christine.
VELSHI: All right. Michael, it is -- it is absolutely tragic. It's tragic in a country that wasn't expecting this -- a country that is so known for being peaceful.
Michael, thanks for your coverage -- Michael Holmes from Oslo.
ROMANS: All right. New this morning, could the murder conviction of American student Amanda Knox be thrown out? Two independent forensic experts appointed by an Italian judge now reject key DNA evidence used to convict Knox.
Knox's case is currently under appeal. She was sentenced to 26 years for the murder of her roommate. Prosecutors say they found Knox's DNA on a knife they believed is the murder weapon but the experts claimed the knife blade is too small to accurately test for DNA.
VELSHI: All right. With those debt talks stalled and the default clock ticking, are hard-line conservatives now hurting their own cause? We're going to talk about that with the great granddaughter of the president who presided over the Great Depression. Author Margaret Hoover joins us, coming up.
It is 40 minutes after the hour.
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ROMANS: It feels like the last minute on the debt talks, right? But this been in the works for months. The deadline to raise the debt ceiling is only eight days away.
We want to show you how we got to this point.
Remember, the treasury secretary has been warning about this since actually before January. He said that we had until May before we hit that $14.294 trillion debt limit. The Treasury Department tapped other sources instead once that limit was hit. The government can continue to pay its bills over the summer.
Treasury Secretary Tim Geithner told Congress it now has until August 2nd to raise the debt ceiling or face default.
Now, back in May then, you had bipartisan talks -- bipartisan talks with congressional lawmakers. In June, those talks broke down over Republicans insistence that the deal include revenue increases along with spending cuts.
Now, July, the president gets involved. He begins to hold debt talks with Speaker Boehner, secretly working with some deals, working with speaker of the House to reach a deal. But guess what? Those talks broke down again.
By July 22nd, Speaker Boehner broke off the talks with the president amid disagreement over taxes and entitlement programs.
Over the weekend, the president continued talks with congressional leaders, but you know what? Ali, little progress has been made.
The bottom line: Washington has had months and months to figure this out, but has not been able to reach a deal -- and again, only days before the United States has huge bills to pay in the beginning of August -- Ali.
VELSHI: Christine, we are journalists. We are here to report. We are not here to opine. Is it fair to opine at this point, as a journalist, as a veteran financial journalist that you are, that this is ridiculous?
ROMANS: It is ridiculous in all capital letters, Ali.
VELSHI: Excellent.
ROMANS: This is a political crisis, not a financial crisis.
VELSHI: That is correct.
ROMANS: We have financial problems we've been reporting on for years. This is a political problem and that's what's really kind of --
VELSHI: That is why when people say America could be the next Greece, I say, no, Greece actually has a financial crisis. America has a financial crisis that is exacerbated by a remarkable political crisis.
OK. Let's continue this conversation.
Our next guest knows a thing or two about hard economic times. Margaret Hoover's grandfather was Herbert Hoover, the president who presided over the Great Depression. Margaret has worked on two presidential campaigns. She's with us this morning to discuss the debt talks and the hard line taken by some conservatives and Tea Party members in this debt negotiation. She's written a new book called "American Individualism: How a New Generation of Conservatives Can Save the Republican Party."
We are also joined this morning by Democratic strategist Kiki McLean, good friend of the show. She is in Washington.
Kiki, I'm going to start with you. This is a no spin zone. Can we say that? Or is that a different network?
KIKI MCLEAN, DEMOCRATIC STRATEGIST: Don't say that one now. No --
VELSHI: No political -- no political spin here. No bumper stickers, no partisan talk. We know you're great at this. How does this end?
MCLEAN: I can't tell you right now because it's a moving target. Here's what's really fascinating to me about this, Ali, and you guys are right about the political nature of this crisis, because every time in this case -- and I come at this from somebody who's been a real supporter of having a bipartisan solution on this.
I think you know that my bet and my politics, but every time Republicans, and particularly the speaker or Mr. Cantor, his number two, has said there's something they wanted the president has agreed to that, then they get up and they walk away from the table.
So we want significant cuts in spending. Great. The president says I'm there. I'm for over 4 at the number. We want the president at the table. Great. The president comes to the table. That's not enough. They get up and walk away. And it continues and continues and continues.
And here's why. Because ultimately, the far right extremists are controlling that caucus and these guys in the Republican caucus right now are all about their own political survival and that's why they won't agree to put everything on the table including those revenue increases.
VELSHI: Margaret, there is definitely something to be said for Kiki's point that there are hardline conservatives who had come in here who are definitely taking a line that says we're not compromising. There will be no tax increases or revenue increases or cutting of tax loopholes or credits. That's not part of the deal.
MARGARET HOOVER, AUTHOR, "AMERICAN INDIVIDUALISM: HOW A NEW GENERATION OF CONSERVATIVES CAN SAVE THE REPUBLICAN PARTY": I think there are certainly are those people in the House Republican Congress --
VELSHI: Yes.
HOOVER: Caucus. I think that they are not the people that are at the leadership table.
VELSHI: Absolutely.
HOOVER: I think -- I think those people are people that -- Boehner and Cantor are having to deal with. And the message to them is, look, we're at a point now, where compromise doesn't mean compromising your principles. We've gotten to this point and we've gotten to this point because 87 freshmen were elected to the House of Representatives, they put new urgency on reforming debt and deficit.
VELSHI: Right.
HOOVER: The fiscal future of the country, and this is not a loss. We're not going to lose. But --
VELSHI: You've got the 87 freshmen, many of whom came in on the wins of the -- of the Tea Party.
HOOVER: Absolutely.
VELSHI: You have 230 I think who have signed the Grover Norquist pledge, the American for Tax Reform pledge that they will not increase tax reform. Bottom line is, how do you -- how does the math get you a compromise with people who won't compromise at all on taxes?
HOOVER: Well, look, I mean there's -- Boehner had 800,00 -- $800 billion on the table.
VELSHI: Yes.
HOOVER: And now it's closing loopholes, and the ethanol, wind tax credits, and this is a concession for many of these Tea Party folks but they're willing to make it.
VELSHI: Right.
HOOVER: And I think, you know, Kiki, I appreciate your characterization that the Democrats -- the Republicans keep moving the goal posts and I think the Republicans would say that's exactly what's happening on their end as well.
At the end of the day, we've got eight days. As we both know we have eight days to probably pass what we're going to pass is a short- term debt ceiling raise, with probably some spending cuts because that's probably the only thing that's going to get us over the line because nobody is willing to have --
VELSHI: Good.
(CROSSTALK)
VELSHI: We can talk about this again in a few months.
MCLEAN: Here's the problem, we don't -- but Ali, but Ali, we don't really have eight days. And you know that.
VELSHI: Yes.
MCLEAN: Because the Asian markets have already started to react to us this morning. As we speak. It's clear that any legislation has to be posted this afternoon in order to make that deadline. But here's the real rub of the matter. And people ought to pick up their phones and they ought to call their members of Congress today.
And that is this. There is a chance to make big change for this country, long-term change, not just to get somebody through the next six months or their primaries next fall. The president put on the table a plan, Democrats are there in the Senate to say, let's cut spending, let's do the right thing --
VELSHI: But in fairness --
MCLEAN: -- on revenue and let's race this debt ceiling and get it done.
VELSHI: The president having some problems with Democrats on the --
MCLEAN: Sure.
VELSHI: When you talk about that big deal --
MCLEAN: The president --
VELSHI: You're right. We don't have eight days. We probably have 48 hours.
MCLEAN: The president took some heat in his own party because he said there is some place on entitlement reform that I will go. He didn't make it an all or nothing deal and he was willing to go there in a big package on the table all last week. But today is the day.
HOOVER: Kiki, I appreciate that.
MCLEAN: Today is the day that we can make it happen.
HOOVER: Kiki, I appreciate that, but the reality is, we all know -- actually there has been no plan from the president of the United States. There has been framework, there has been speeches --
(CROSSTALK)
MCLEAN: And Margaret, and in that -- in that framework --
HOOVER: -- coming from the House of Representatives and only bill that has been passed has been in the House of Representatives.
MCLEAN: And the reality is --
(CROSSTALK)
HOOVER: And so, you know, it's hard to work with the White House when you don't have something in writing from them.
MCLEAN: Yes. Margaret, the realty is, the president has been public, that he would stand up for the bigger program -- bigger process of cutting spending including entitlement reform. He's been very public on that. And Republicans just chose not to take him up on that offer.
(CROSSTALK)
VELSHI: Margaret, there's got to be some tax hikes, come on. Even reasonable --
HOOVER: We can -- we can close loopholes, we can do --
(CROSSTALK)
HOOVER: There's a lot of things we can do.
VELSHI: Tax reform.
HOOVER: Yes. Tax reform. Absolutely.
(CROSSTALK)
VELSHI: But you understand that some people including Grover Norquist and his group says that closing loopholes and those credits are not -- they're tax hikes.
HOOVER: I think that they're -- we're all willing to make some compromises on that.
VELSHI: All right. Well, good.
MCLEAN: Haven't seen it.
VELSHI: If you two were hammering it out we would have a deal. Margaret Hoover and Kiki McLean, thank you so much for joining us.
Margaret's book is great, it's how a new generation -- "American Individualism: How a New Generation of Conservatives Can Save the Republican Party."
Time for a quick break. Fifty-one minutes after the hour. We will be right back.
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VELSHI: Fifty-two minutes past the hour. Here's a look at your morning headlines. Markets across the globe reacting to the stalled debt talks in Washington. It closed lower in Asia, they're mostly down in Europe.
Today President Obama has canceled two fundraising appearances to work on a compromise.
A minute of silence observed throughout Norway this morning for the 93 victims of Friday's bloody terror attacks. Within the next hour the suspect Anders Behring is expected to appear in an Oslo courtroom for a bail hearing.
A string of suspicious fires in California over the weekend. We're -- police are looking for an arsonist who set as many as 18 fires in north Hollywood. Fires began in cars but quickly spread to buildings. No one has been hurt.
It took a superhero to beat the boy wizard. "Captain America" swooped in to take over this weekend's box office raking in $65.8 million. "Harry Potter" knocked to second place. Last week it broke the record for the biggest movie debut in history.
You're caught up on the day's headlines. AMERICAN MORNING back right after this.
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VELSHI: The battle going on right now in North Dakota between a school, the NCAA and the state over a Native American nickname. The NCAA has threatened to punish University of North Dakota if it doesn't drop the Fighting Sioux nickname and mascot saying that they are offensive to American Indians.
But now the state has passed a law requiring the school to keep the name and logo. Basically a way of telling the NCAA to stay out of it. The league says it is not backing down from its policy.
ROMANS: No word on changing the names of the state's North Dakota, South Dakota, Iowa, Illinois, Minnesota.
VELSHI: Right. That's right.
ROMANS: And all of the places that are named for -- I think the idea that --
VELSHI: Right.
ROMANS: The Fighting Sioux and the representation.
VELSHI: Right.
ROMANS: Anyway, that's an interesting, interesting drama.
OK, a week from tomorrow the federal government could run out of cash to pay its bills. At this hour the Republicans and Democrats are standing firm unwilling to abandon their position when it comes to raising the debt ceiling.
VELSHI: So that brings us to our question of the day, who do you think is to blame for the debt gridlock.
On Facebook, Sean says, "I would say we have to blame ourselves because we elected these people who now do nothing. But in reality I believe it's the stubbornness of the Republican Party and its lack of willingness to work on anything constructive with this administration."
I do like the fact that Sean is willing to say that we, who do not like compromise that is not in our interest, have some responsibility in this.
ROMANS: Interesting. Supporters of the Tea Party Republicans say no, it's the Tea Party Republicans who are finally doing something after nothing has been done for years and years. They're saying, we're going to use the leverage of our debt ceiling to get the debt and deficit under control.
Johnx13 on Twitter says, "Obama. First he ran it up after promising to cut it, and now he wants to continue to run it up and spend even more."
This isn't about spending more money. This is about --
VELSHI: Not paying the bills. The money that you already spent.
ROMANS: Paying the bills -- you know, you bought the car off the lot and now you're saying, you know what, actually I couldn't afford that car, I'm going to keep it but not I'm not going to pay you.
VELSHI: But I'm not going to pay for it.
ROMANS: That's what the American government is doing.
VELSHI: Keep it coming, it's coming. Send us an e-mail, tweet, tell us on Facebook. We'll read more of your thoughts a bit later in the show. We're taking a quick break. It's 56 minutes after the hour.
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