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American Morning
Rogue Trader Costs UBS $2 Billion; Solyndra Stimulus Loan Investigated; Rapper Common Interviewed about New Book; Rachel Zoe's New Project
Aired September 15, 2011 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(COMMERCIAL BREAK)
CHRISTINE ROMANS, CNN ANCHOR: A rogue trader racks up an estimated $2 billion in losses at Swiss banking giant UBS.
I'm Christine Romans.
This morning, there's word of an arrest. We're live in London.
CAROL COSTELLO, CNN ANCHOR: Taxpayers burned.
I'm Carol Costello.
The White House on the defensive for pushing through a stimulus loan to a solar company that just went belly up, leaving you on the hook for more than half a billon dollars.
ALI VELSHI, CNN ANCHOR: Good morning. I'm Ali Velshi.
Common is here to rap about his new memoir, racism and getting pulled into the White House controversy -- on this AMERICAN MORNING.
(MUSIC)
VELSHI: I have been doing this every morning and I just stepped on Christine's foot. That's a first.
ROMANS: That's all right. That's all right.
Good morning. It's Thursday, September 15th.
VELSHI: Out of practice.
ROMANS: I forgive you.
VELSHI: I'm sorry about that.
COSTELLO: She didn't even scream. I'm impressed.
VELSHI: I got my whole weight on her foot.
COSTELLO: First off this morning, a rogue trader being blamed this morning for a massive fraud at banking giant UBS. VELSHI: And when we are saying massive, we're talking massive. We're talking about $2 billion, which would make it one of the largest losses in unauthorized trading ever.
ROMANS: And we're now learning someone is under arrest in London, an arrest late last night for fraud and abuse of position. That's where our Atika Shubert is following developments for us live this morning.
Good morning, Atika.
ATIKA SHUBERT, CNN CORRESPONDENT: We have no other words on the arrest other than it happened at 3:30 this morning, according to London police and that the person who was arrested has been arrested on suspicion of fraud by abuse of office. That's all we know at this point.
We're still waiting to know if there are any more details from UBS. All they really put out so far is that statement that they believe the estimated loss from these unauthorized trades is about $2 billion. Now, that's a lot. Not enough to break the bank, literally. But it is enough to cause a serious dent, and possibly a third quarter loss for the Swiss bank.
VELSHI: Atika, there's no connection being made by the police to this UBS issue. Is anybody making that connection? Is UBS saying that this is the name of the person we're looking for?
SHUBERT: UBS hasn't given any more details. What we know is that arrest happened early in the morning and just a few hours later, UBS made that announcement. But we have yet to hear from UBS officially on the name of the trader, who that trader might be, or how these losses were effectively caused.
VELSHI: All right. And Christine and I were just talking about this earlier, where -- you know, if we characterize them as rogue trades, that's different from unauthorized. Unauthorized could be a mistake, it could be something like that. We don't have any further characterization. All we know is that they're talking about $2 billion in losses.
SHUBERT: Well, that's just it. We don't know exactly how it happened at this point. We're still waiting for UBS. They say they're investigating.
But, obviously, a big dent in their confidence. Remember, they were really just starting to recover after they get bailed out by the Swiss government.
VELSHI: Right.
ROMANS: Well, we've seen the cases -- thank you, Atika. We've seen the big cases before, a little bad trade and trying to cover it up. Sometimes we've seen cases where it's been a mistake that someone has tried to cover up and it just snowballs.
VESLHI: We are in such a different world now. I think Atika talked about confidence. That's the issue, right? You want these places to be airtight. You're hoping that these major banks have systems in place where rogue trades don't happen.
ROMANS: You say confidence has three keys in the UBS logo stand for confidence, security and discretion.
COSTELLO: Oops!
VELSHI: Well, a couple of those are not working so well this morning. Those keys are not unlocking the right door perhaps.
ROMANS: All right. Breaking news out of Norway this morning. We're looking at a new video here of a cruise liner that caught fire earlier this morning. Two crew members have died and six others are still in the hospital, but all 207 passengers are safely back on shore in the town of Alesund. Officials says the fire started in the ship's engine room.
COSTELLO: New developments out of Libya, too, this morning. British Prime Minister David Cameron and the French President Nicolas Sarkozy pledging their support for the new rebel leadership. Cameron says the NATO mission must continue until all Libyan civilians are protected and that Libya's allies will help the National Transitional Council bring Moammar Gadhafi to justice.
(VIDEO CLIP PLAYS)
COSTELLO: In the meantime, rebel fighters and Gadhafi loyalists have been battling out in Bani Walid, one of the regime's last strongholds. Rebel leaders set a deadline of tonight for people to leave that city in anticipation of a new assault.
A potential good sign for those American hikers convicted of spying and sentenced to eight years in prison, an official from Oman has flown to Iran to try to negotiate the hikers' freedom. Now, this may get confusing for you because some people thought they were going to be freed already. In the meantime, a lawyer for those two hikers says he's filed all the paperwork for them to be released on bail, but he doesn't expect judges to act on it before the weekend.
The issue is the Iranian president, Mahmoud Ahmadinejad, has said a couple of days ago they'll be released in a couple of days, and now, they're still negotiating for their release.
COSTELLO: Hopefully by Saturday, though. That's what they were thinking.
ROMANS: All right. You, the American taxpayer, is on the hook this morning for more than half a billion and here's why. Solyndra Incorporated, it's a solar panel company in California that just declared bankruptcy after receiving $535 million in federal stimulus money from the White House. All of it coming from your tax dollars.
COSTELLO: Dan Lothian is live at the White House this morning.
So, how is the administration responding to this, Dan? DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, you know, they're still defending this deal. And you might recall, this is a company that this White House has been supporting for quite some time during the groundbreaking. Vice President Biden was there with other dignitaries. Later, President Obama visited that company, highlighted it as part of the green energy future.
But there are those e-mails that suggest that there was this rush to get this deal done in order to meet a timeline. One e-mail from a White House staffer saying, quote, "I would prefer that this announcement be postponed. This is the first loan guarantee and we should have full review with all hands on deck to make sure we get it right." Another e-mail from the Department of Energy staffer is saying in part, quote, "The model runs out of cash in September 2011."
In an off-camera briefing with reporters yesterday, White House spokesman Jay Carney said the e-mail suggests that there was an urgency, but only to make a decision about a scheduling matter. He also gave another defense in a briefing a little more than a week ago saying that in business, not everything works.
(BEGIN VIDEO CLIP)
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: There are no guarantees in the business world about success and failure. That is just the way business works and everyone recognizes that. And that's why, you know, over 40 companies, as I understand it -- 40 guarantees involved in this program that they're looking at. There's no individual, you know, you cannot measure the success based on one company or the other.
(END VIDEO CLIP)
LOTHIAN: Now, Carney said that there's no evidence that the administration did anything wrong, that the president remains committed to this loan guarantee program and, also, to green energy technology. He also pointed out that the process by which this loan came through was set up by the former administration. But, again, we should emphasize that this was done with stimulus dollars and, today, a lot of questions about how that money was spent.
COSTELLO: Yes, Dan, it was set up by the former administration. But the former administration said, I'm not so sure about this company. And the Obama administration went full guns.
LOTHIAN: That's right. And, you know, you have to understand that this green energy technology is something that the president has been pushing for quite some time. There's a lot of concerns about not wanting to give up any ground to the Chinese, who can provide this kind of technology at a lower cost.
And so, you know, what the e-mails are suggesting is that they really wanted to get this out there as sort of, you know, one of the companies that can create thousands of jobs. Those jobs were there, but now, they've all gone away.
COSTELLO: Dan Lothian reporting live from the White House, thanks to you.
VELSHI: Something else happening at the White House, Dakota Meyer gets the Medal of Honor from President Obama. Very impressive. Twenty-three-year-old former Marine from Kentucky cited for charging through heavy gunfire five separate times to rescue other servicemen during an ambush in Afghanistan in 2009. He is credited with saving 36 lives.
This is one brave guy. The president and Meyer have already met, by the way. The White House releasing this photo of the two men talking over a couple of beers last night on a patio outside the Oval Office. Apparently, he said he'd love to have a beer with the president.
COSTELLO: And the president opened up the beer patio and it was sparkly night in Washington. And yes!
ROMANS: He was 21 years old in 2009. You know, just amazing, amazing.
VELSHI: He gets to have a beer with the president, if he asks for it.
ROMANS: A scare on a United Airlines flight. Minutes before take off at Dulles International Airport, passengers had to slide to the emergency slide after they spotted smoke coming from an engine. They told the flight crew.
One passenger tweeted, "I'm shaking, people were screaming." Still not clear whether the engine did catch fire.
Supreme Court Justice Ruth Bader Ginsberg, who is 78. She has battled cancer. She was one of those passengers, one of the 179 passengers who had to slide down the chute. The court spokesperson says she's OK.
COSTELLO: She's tough.
Still amazing video from the Detroit Tigers game. The catcher is getting hit in the face with a baseball and it actually causes sparks to fly. I mean, literally.
Isn't that something? Oh, we're going to show it to you, again, after a break.
VELSHI: And Grammy Award winning rapper Common is in the house. We're talking racism. We're talking the controversy surrounding his appearance at the White House earlier this year. We're talking about President Obama and the support in the black community for the president.
It's 12 minutes after the hour.
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ROMANS: All right. No one is sure exactly what lit up the sky in the Southwest last night.
VELSHI: Actually, I had a number of tweets. People are entirely sure.
ROMANS: What was it?
VELSHI: A UFO.
According to the Twitter, it was a UFO.
ROMANS: The Twitter says it was a UFO.
VELSHI: Yes.
ROMANS: OK. Take a look. Dozens of people in California, Nevada and Arizona, they're calling 911 to report a UFO. There it is. It's a streak of light described by some as a fireball shooting from west to east. Experts believe it may have been a meteor or a falling satellite.
COSTELLO: And who knows, some extraterrestrial beings could have been on board, whatever the thing was.
VELSHI: I would be curious to see what Rob Marciano thinks. Do you think it might have been a UFO?
ROB MARCIANO, AMS METEOROLOGIST: I think that's a great answer because a UFO is defined as unidentified flying object, which is a pretty --
VELSHI: No, no. Is it a flying saucer with aliens?
(CROSSTALK)
MARCIANO: You know, I'm a little bit skewed because just last night, I saw some -- not the greatest movie in the world, where these aliens come in and what seems to be meteors or asteroids flying into the earth. They land in the Pacific Ocean and they rise up and they attack the United States.
COSTELLO: They attack the United States.
MARCIANO: I'm not kidding. But, you know --
COSTELLO: What movie was that?
MARCIANO: I think it's "Battle of Los Angeles."
(CROSSTALK)
COSTELLO: Enjoy those now because once you have kids, you're never watching a movie again. I'm just telling you right now.
MARCIANO: It was a lot a miles (ph), even with more -- it's been a lot of money on that pocket. I tell you that to you. All right. A lot of aliens and a lot of exploding cars and the like, we have some, well, none of that, actually, but we have some cooler air that's moving in across the eastern U.S. Look at the difference in temperatures between New York and D.C., both right around 70 or 67. temps behind the front in the 40s, 30s, even some 20s reported.
Some of this cool air is starting to drop down towards Texas, even some rain across Northwest Texas. We will take that, right, especially with the fires that are happening across much of the south and central part of the state. Record highs again yesterday. We won't be seeing these, I think, for quite some time. 104 in Waco, Shreveport 102, Houston 100. That's the 46th day they've seen that.
Atlanta saw the 90th day of reaching 90 or better this summer. That ties records. So, records for heat now we're starting to see some record cold temperatures across the upper Midwest. Temps into the 20s and there's some rainfall as we pointed out. There'll be some thunderstorms ahead of this front, as well. New York metros, Boston will see some delays because of that. So, let's just keep that in mind.
Same thing with D.C. if you're traveling via air today. Atlanta and Denver will see some less delays. 83 expected in Dallas. You will certainly take that. 64 in Kansas City, a chilly 61 degrees in Minneapolis and all that cool air is filtering off to the east. So, fall just around the corner. Couple days away, a couple weeks away and starting to feel like it.
COSTELLO: Yes. It almost leaf peeping weather.
MARCIANO: Leaf peeping, unidentified flying objects, I mean, just all across the board.
COSTELLO: Thanks, Rob. I always hated that term. I always hated that term
VELSHI: Who uses that? I go on a drive, an autumn drive every year, and it's one of the nicest things ever, and you just ruined it for me by calling it leaf peeping.
COSTELLO: It does sound perverted.
VELSHI: It sounds gross.
(LAUGHTER)
VELSHI: Leaf peeping. I need a bath after that.
(LAUGHTER)
VELSHI: All right. The New England Patriots are in damage control mode this morning after quarterback, Tom Brady, made a huge error of having him get-on (ph) his moment, telling fans to get sauced (ph). Check this out.
(BEGIN VIDEO CLIP)
TOM BRADY, NEW ENGLAND PATRIOTS QUARTERBACK: Yes, they're drinking early. Get nice and rowdy. It's 4:15 game, they'll have a lot of time to get lubed up, come out here, and cheer for their home team.
(END VIDEO CLIP)
VELSHI: After that, Patriots' media relations came out and said, he didn't mean start drinking alcohol early, he meant water to stay hydrated.
CHRISTINE ROMANS, CNN ANCHOR: Can't the guy just be excited about his game?
COSTELLO: No, really. Let's imagine the PR meeting. Oh, my God. Tom Brady, he said fans drink before the game, so we got to say something.
ROMANS: What Tom Brady meant to say --
VELSHI: Yes.
COSTELLO: Brilliant.
VELSHI: Yes. Ridiculous.
(LAUGHTER)
ROMANS: All right. It wasn't quite a scene from the natural but sparks flew in Chicago a couple of nights ago. Check it out. Here's Tigers' catcher, Alex Avila. Take the (INAUDIBLE) off the face mask. Sparks literally fly. The stadium played the song "Ring My Bell" after it happened.
(LAUGHTER)
ROMANS: Though, the catcher had no clue what the media was talking about when they asked him about it after the game.
COSTELLO: He's amazing. I am telling you, he is amazing. He gets hit so often for whatever reason in the face mask. Thank, God that thing is over his face.
VELSHI: Right.
COSTELLO: But he's one tough guy because they don't have a back-up catcher right now because Victor Martinez is a little hurt.
VELSHI: That was crazy. That was a big hit. I mean, I know the mask is designed to protect you, but just that force hitting something around your head even if it's defused is quite a bit.
COSTELLO: And he's having quite a year, too. You go, Alex.
(LAUGHTER)
COSTELLO: Now is your chance to talk back on one of the big stories of the day. The question for you this morning, what would it say to you if Congress took a pay cut? Stop laughing, I know you're laughing. A nonpartisan group called the Taxpayer Protection Alliance sent this letter to lawmakers urging them to cut their extravagant salaries of $174,000 a year by 10 percent. They say it was a taxpayer's $100 million over 10 years. Before you say fat chance, Democratic Senator, Sherrod Brown, has introduced legislation calling on lawmakers to wait until the age of 66 before receiving a pension. Right now, lawmakers can retire as early as age 50 with a full pension, depending on your years of service.
I know, you're still laughing because we've heard it all before. Last February, as Americans faced the possibility of a government shutdown, Senator Barbara Boxer had a dandy idea.
(BEGIN VIDEO CLIP)
SEN. BARBARA BOXES, (D) CALIFORNIA: If the government is forced to shut down, members of Congress and the president should be treated the same way as all other federal employees. We should not be paid.
(END VIDEO CLIP)
COSTELLO: Well, the government didn't shut down. So, I guess, Congress got a pass on that one. But, seriously, if lawmakers did take a pay cut or raised their retirement age, there I say it, would that be patriotic, responsible, moral? We'd like to hear from you. So, the talkback question today, what would it say to you if Congress took a pay cut? Facebook.com/americanmorning. Facebook.com/americanmorning. I'll read your comments later this hour.
VELSHI: All right. Coming up next, how do we get Americans out of work back to work? A look at the job trends of the future on AMERICAN MORNING right after this. It's 21 minutes after the hour.
(COMMERCIAL BREAK)
ROMANS: Welcome back. "Minding Your Business" this morning.
Right now, U.S. stock futures for the Dow, NASDAQ, and S&P, they're all trading higher ahead of the opening bell. Wall Street, of course, closely watching developments in Europe on the debt crisis today. Optimism that Greece is going to get some support from France and Germany on all of this.
VELSHI: We have a new pickle developing, and that is this UBS thing. UBS saying overnight that it's lost up to $2 billion on unauthorized trades, and then, there's this arrest that's been made in London for 31-year-old man on fraud. Nobody saying that they're connected, but some people are thinking they are. So, keeping an eye on that.
Investors are also watching the initial jobless claims report that comes out in just a few minutes. This report comes out every week, but it's especially noteworthy right now, because the president is off across the country trying to sell his job's plan. We're going to give you the numbers on the initial jobless claims as soon as they're available.
COSTELLO: Yes. Can't wait. It is the American dream, a steady job, a home, providing for your children, a secure retirement, but today's unemployment rate and the struggling economy, well, is threatening it all.
ROMANS: So, you know, we just want to figure out how to get America back to work. For all those people out of work, how are we going to fix it? We're joined now by Steve Case, the man who started AOL back in 1985. He's also chairman of the Startup America Partnership. Steve, welcome to the program.
STEVE CASE, CHAIRMAN, STARTUP AMERICA PARTNERSHIP: Good morning. Good to be here.
ROMANS: You know, we're looking to the government. We're looking to small businesses. We're looking to people who have started bug businesses for some advice and some counsel here. You got too many people out of work. You got companies sitting on $2 trillion in cash. What does it take to make companies start to hire in this country?
CASE: Well, the key, if you look at the statistic over the last 30 years, all the net job creation has been high-growth entrepreneurial companies. It's actually not the big companies. It's not really the small, you know, businesses on Main Street. Those are both important parts of the company.
ROMANS: Yes.
CASE: But all the growth is this high-growth entrepreneurial company. So, the key thing from a policy standpoint is making sure that people in Washington come together to make sure there's a road map going forward that really unleashes the next wave of entrepreneurs because that's how you create the big job numbers, and it's also how you get the economy moving and make sure we're competitive in what, obviously, is a more competitive global world.
COSTELLO: As far as getting big companies to spend money to hire workers, I mean, what can you do to convince companies to do that? We know they're uncertain about the economy, and perhaps, that's why they're not hiring new people. The head of the Teamster's unit put it this way, you know, maybe we should start to question their patriotism or whatever Jim Hoffa said it was unpatriotic of companies not to hire. Is it unpatriotic?
CASE: That might be a little strong. I think some of the rhetoric on these issues gets a little intense. I think we don't just have an economic crisis and a jobs crisis. We have a political crisis. I live in the Washington, D.C. area. I've been watching this unfold over the last 20 years and has gotten worse and worse. And this is the time for people to come together and particularly focus on entrepreneurship.
The best thing we can do is create some confidence and certainty in terms of the policy coming out of Washington, and everybody know what the rules are. That's, I think, the main thing that's keeping big companies from investing. But, as I said, in the beginning, the key is really getting smaller, high-growth companies going.
That really is -- if you look at history of America, is the history of entrepreneurs, we were built by entrepreneurs. Industries were built by entrepreneurs. All the Fortune 500 started as startup. So, let's get back to focusing on the role entrepreneurs play and driving innovation and driving job creation.
VELSHI: As you know, entrepreneurship inherently involves failure.
CASE: Sure.
VELSHI: You have to accept that, and you have to accept that's part of what it is. Let's talk about the Solyndra. You know, this was -- there are some questions as to whether the executives of Solyndra had an all too close relationship with the Obama administration and that's a valid question.
Putting that aside, the idea the administration used stimulus dollars to loan a company that was in a field that we would like to get better at some money, that, is that entrepreneurship or is that bad judgment or is in the words of the "Wall Street Journal's" Steven Moore this morning, is that the kind of engineering that government should be --
CASE: I don't know the details on Solyndra. I haven't really tracked it. But I do think that, as you say, entrepreneurship is risky. A lot of companies have started fail, and so the private sector is the place to really take the leader and making sure they're at the right incentives for the private sector. One of the things that was in the president's proposal last week were some incentives around capital formation, making it easier for companies to raise capital in the early stage, make it easier for young companies to go public.
Actually, 90 percent of the job creation happens after companies go public. We saw that with AOL. We went public with 200 employees after seven years. Eight years, later we had 10,000 employees.
VELSHI: Wow.
CASE: So, making it easier for companies to use the private market and access that capital whether to get a start up going or to get a speed up ramped up is really critical. That's what we've seen with some of the companies I've been involved in, including social -- really driving that growth through talent and capital is critical.
COSTELLO: So, it is the government's role to give $500 million to a company to get it started. Is that the government's role?
CASE: No. I think the government's role is to put the framework in place, the policy framework and make sure the right incentives are in place. Now, there are times where government feels like they need to step in, like the stimulus a couple of years ago, to kind of prime the pump, but in the long run, the private sector needs to do its job. We make sure the government has the right incentives and certainly in terms of what the rules of the road are.
And then, I think you'll see more capital flowing in to job creation. But let's not lose sight, as I said, of the critical role entrepreneurs play. It's not really about the Fortune 500, even though that get all the attention. It's really about making sure we're backing the next generation of great entrepreneurs. ROMANS: And next time we get you come back, I want to talk about whether we're training and creating them because we got SAT numbers that show that the SAT scores are falling for the generation Y.
CASE: Particularly on science and technology, math, and immigration another issue. We need to take a fresh look at that to make sure we really are magnet for the best talent we always have been. We need to continue to because those people often are in the companies that create the jobs.
ROMANS: We got to go right to the very beginning because we're not doing a good enough job at it. Thanks.
VELSHI: Steve Case, good to see you.
CASE: Good to see you.
ROMANS: All right. Up next, Democratic strategist, James Carville, has just one word of advice for President Barack Obama, panic. We'll explain what he means and what he thinks the president should do next. It's 30 minutes after the hour.
(COMMERCIAL BREAK)
ROMANS: Welcome back. Top stories. A rogue trader may have cost Swiss banking giant UBS $2 billion. According to the bank, the unauthorized trading, as they're calling it, could result in UBS reporting a loss for the third quarter of this year. UBS says the incident is still under an investigation. CNN is also learning a 31- year-old man was arrested in London on suspicion of, quote, "fraud by abuse of position." But officials will not confirm if this case is linked to UBS.
VELSHI: Two crew members have died after an engine fire on a Norwegian cruise ship. Six other crew members are still in the hospital. We're told all the passengers are safe and they're back on dry land.
COSTELLO: An official from Omaha is in Iran trying to negotiate the freedom for those two American hikers convicted of spying and sentenced to eight years in prison. There have been conflicting reports from the Iranian government about whether or not Josh Fattal and Shane Bauer might be allowed to go free, but a lawyer for the two hikers said he's filed all the paperwork for them to be released and something should happen by Saturday.
ROMANS: All right, the White House this morning is trying to defend its decision to award a $535 million stimulus loan to company called the Solyndra Corporation. The California solar panel company is now bankrupt, taxpayers on the hook for all that money. The FBI and the department of energy are investigating.
VELSHI: And public schools in Tacoma, Washington, will be open today, but it's not clear striking teachers will honor a judge's back to work order. The school district claims the strike is illegal because teachers are public employees and they don't have the right to strike. COSTELLO: The latest SAT scores are in, and they're not good. Scores for this year's graduating seniors fell in all three subject areas. The average reading and writing scores were the lowest ever. More than 1.5 million students took the SAT. Just 43 percent scored high enough to indicate they were ready to succeed in college.
ROMANS: That's, that's just scary, scary. When we're supposed to out-innovate the rest of the world and we can't educate our kids.
All right, nothing more political right now than how to create jobs and how to invest in America. Witness the debate in the opinion pages this morning over failed solar company Solyndra. President Obama visited this company back in May, 2010. There he is. It's an unfortunate photo-op for the president, who touted the company as a stimulus success, a company that received $535 million loan guarantees and then recently filed bankruptcy.
The "Wall Street Journal" says in today's editorial no big deal was the message from White House deputy budget director Jeffrey Zients who said that the Energy Department decided to back many loans, and said, quote, "We have reason to be optimistic that the portfolio as a whole will perform." When you're picking political winners and losers, taxpayers sometimes have to take a $500 million for the team."
But a group of venture capitalists writing in "Politico" says the support granted to Solyndra is just one example of what is needed to move forward. "To remain in the game we must take an all of the above approach to energy. In the long run Americans will lose if we abdicate our commitment in the face of short-term financial losses."
And a little advice for the president this morning. This from CNN contributor James Carville on CNN.com's opinion page. Carville says, simply, "What should the White House do? Panic." He says "Fire, indict and fight. For god's sakes, why are we still looking at the same political and economic advisers that got us into this mess? It's not working. Furthermore, it's not going to work with the same team, the same strategy, and the same excuses. I know economic analysts are smart, some work 17 hours days. It's time to show them the exit. Wake up, show us you are doing something." I will also tweet links to all of these really good opinion pieces this morning.
VELSHI: I don't know if this hurts or helps, but we just got the weekly jobless numbers. These are the number of people who filed for unemployment claims for the first time last week. The number coming in at 428,000. That's disturbingly high. It's the highest that weekly number has been in two months. We are always looking for a number under 300,000. We don't get that a whole lot these days.
ROMANS: Under 400,000.
VELSHI: I'm sorry, under 400,000. To see it go up to 428,000 -- I don't know if that helps or hurts the president's argument about getting the jobs plan passed.
ROMANS: We've talked a lot about the long-term unemployed, and that's been just so intractable, these people have been out of work for six months or longer. With this number that Ali is talking about, people who just lost their job very recently. There are layoffs happening and you want to see the number go below 400.
VELSHI: That's alarming. That will probably start to affect our futures in a little bit. We'll bring you up to speed on that.
But, we have a distraction from all of this.
COSTELLO: And a good one.
VELSHI: Coming up next, rapper, author and actor Common is right here. There he is. He's coming on in. We'll talk to him after the break. It's 36 minutes after the hour.
(COMMERCIAL BREAK)
COSTELLO: It is 39 minutes past the hour. Welcome back to AMERICAN MORNING. He's is a Grammy award winning rapper, actor, and writer. And he made huge headlines when he was invited to the White House.
ROMANS: That's right. His new memoir "One day it will all make sense" is being praised for its brutal honest. Common is here to talk about it this morning. "One day it will all make sense."
VELSHI: What are you saying it about?
COMMON, SONGWRITER/AUTHOR: For me it's like one day le and love and different things will al make sense. But I don't think we'll ever know everything. So, some things will never make sense. But one day some of the things will.
COSTELLO: What do you want to say to people? After they read this book and put it down, what do you want them to think?
COMMON: I want them to be inspired. I want them to feel like, I experienced things in my life and they can relate to some of the things I experienced and say, hey, man, my dream I can achieve. My heartbreak I can get through. You know, I may not have had a mom and dad that were there like Common's mom may have been, but I still have love and support and I want to go out and do well in life.
COSTELLO: That's a tall order in these tough economic times to have a dream and to think that you can actually achieve it.
COMMON: Yes. But, I mean, it starts with the belief innowing that you can and putting that effort towards it. And a lot of it, too, is part of the journey that you go through to achieve that dream is what really builds who we are.
VELSHI: I wonder if a guy like you ever needed to write a book because you express yourself so well in your music and your free- styling. In fact you expressed yourself in one of your songs that attracted some attention when you were invited to the White House because some people took some of your poetry to suggest that you thought it was OK to attack police, violence against police. Tell us about this. COMMON: Well, first, I would like to say I never would endorse violence. That's not who I am. And, you know, I think with hip-hop and with art, we should have a voice. What I spoke up for was the injustice that was happening with some -- it was a person that was killed in Cincinnati at that time. That year he was shot over 40 times, I believe. I spoke about it.
And I think, you know, it's important that we, especially I feel like hip-hop artists should take the responsibility to speak about things going on in the world and in the community to raise people's awareness. That's simply what I did.
COSTELLO: You were actually expressing with anti-violence. It wasn't violence against the authorities.
COMMON: Right, exactly.
COSTELLO: Suddenly you were a political story.
COMMON: I was kind of flattered for a second, but, obviously, once I started seeing that they were bashing my name, I was like, man, if these people knew who I was, they wouldn't say this about me.
ROMANS: You are a big supporter of the president and you were to the White House more than one time. What do you think about how the president has been doing his job and his poll numbers aren't good. People want him to fix everything and fix it now and they're disappointed he hasn't been able to.
COMMON: We, obviously, have come from tough times and I think the president's mind and his agenda is in the right place. I feel that it's going to be difficult to know the obstacle that he's coming across. People want it now, now, but I think he's doing the work.
And I really feel that the president is even bigger than politics in the way that he's brought a lot of people together. When I go abroad and I go throughout the world, it's like people feel inspired just by him being in the position he's in. So I think sometimes we even have to just appreciate that and then allow him to do the work that he's going to do. It's politics and it's going to take some time.
COSTELLO: Do you think he's criticized more than other presidents have been?
COMMON: At times, yes, I do believe he is criticized more.
COSTELLO: Where does that come from? Why?
COMMON: Obviously, a lot of it comes from the opposition, you know, people that don't want to see him succeed. So, a lot of those people just eventually come out and say, hey, you know, we -- this guy is not doing his job right. This guy does this and does that. I mean, so --
COSTELLO: You wrote in your book about the president being perhaps not American, and some of the people who said that, who tried to make him lo like the other. COMMON: Yes. Well, like I said, it's people that would not like to see Barack Obama succeed. You have to understand when you're dealing with the world and politics that that will happen. But I believe that, you know, like I said, he's a good human being and he's just trying to do the right thing. So I'm in full support of him.
VELSHI: Common, "One day it will all make sense." I'll keep saying that book title all day. I'll say it to everybody I meet. If anyone says anything to me today, I'll say, "One day it will all make sense."
(LAUGHTER)
VELSHI: Good to see you.
COMMON: Thank you.
COSTELLO: Take care.
ROMANS: All right, morning headlines next, including the most dangerous celebrity to search for on the web. It's 45 minutes after the hour.
(COMMERCIAL BREAK)
VELSHI: It's 47 minutes after the hour. Here are your morning headlines.
The Labor Department has just announced 428,000 unemployment claims were filed for the first time last week. That is the highest level in two months. The number of claims rose from the previous week after economists have forecast it to drop and that is not a good sign for the economy.
Markets open in about 45 minutes. Right now U.S. stock future for the Dow, NASDAQ and S&P 500 are all trading higher ahead of the opening bell. Wall Street watching closely for developments on the Europe debt crisis today.
Swiss banking giant UBS says unauthorized trading has racked up $2 billion in losses, which could mean the bank reports a loss this quarter. Police in London have arrested one person, although they're not saying if the arrest was linked to this claim at UBS.
Heidi Klum is the most dangerous celebrity on the Web that's according to in the Internet security company McAfee. That means people searching for pictures or videos of the super model run the highest risk of downloading a virus, instead.
That's the news you need to start your day. AMERICAN MORNING back right after the break.
(COMMERCIAL BREAK)
CAROL COSTELLO, CNN ANCHOR: Good morning, New York, cloudy and 75 degrees right now. But, watch out later. We're expecting thunderstorms. It's going to be 49 degrees tonight and what -- 37 maybe overnight.
ROMANS: Pack your coat.
VELSHI: Yes but Rob was saying it's that cold front that he always blames Canada for coming down that's going to take temperatures 20 degrees lower than normal. I'll take it --
ROMANS: It's too hot, it's too cold. I want the Goldilocks weather whenever we can get it just right. I'm looking forward to that.
All right, welcome back to AMERICAN MORNING. Name the hottest stars in Hollywood and celebrity stylist Rachel Zoe has dressed and I called her Zoe earlier this week and I was bombarded.
COSTELLO: We are so not yes.
ROMANS: It's a Zo there's no e.
VELSHI: Honestly but soon.
(CROSSTALK)
ROMANS: There's no anything.
VELSHI: She may not be -- need to depend on other people's designer threads. Alina Cho joins us now with this --
(CROSSTALK)
ALINA CHO, CNN CORRESPONDENT: Christine, you have other qualities.
ROMANS: I know, thank you. That's not one of them. I know.
VELSHI: At least Christine knew it wasn't Zoe, I still --- I wouldn't even know that the -- there was an error there.
CHO: Ok, good morning. And you're right. The biggest stars Ann Hathaway, Cameron Diaz, Kate Hudson; how about that, they are all styled by Rachel Zoe. She dresses them for the red carpet and guess what, she's a celebrity, too, on reality television.
Now, she's embarking on another new project and she calls it "The Scariest Thing She'll Ever Do".
(BEGIN VIDEOTAPE)
CHO (voice-over): On TV, she's watched by millions on the Rachel Zoe Project.
RACHEL ZOE, STYLIST: I'm six months pregnant and I'm at the busiest point in my career right now.
CHO: On the red carpet, it's her stylish touch that's front and center. Rachel Zoe makes a mint dressing A-list stars in designer clothing. Now, those celebs are beginning to wear designs by Zoe herself. (on camera): You've been dressing celebrities for so long. When Jennifer Lopez --
ZOE: Oh my God. Like I still get chills I can't even -- because I know where you're going right now and I can't even talk about it.
CHO (voice-over): Jennifer Lopez in a white Rachel Zoe tuxedo dress. That's right, Zoe's first collection for stores on the racks this fall.
(on camera): It's a big leap to go from stylist to designer.
ZOE: It is. And I have very high expectations of myself.
CHO: You call it the scariest thing you've ever done.
ZOE: It is 100 percent is the scariest thing I've ever done. This isn't something where I'm dressing someone and it's the Oscars. This is a very constant, constant process.
CHO (voice-over): She's in Bloomingdale's, Nordstrom's, Sacks Fifth Avenue and every Neiman Marcus in America. Something that company has never done for a first-time designer. And the clothes priced between $200 and $600 are already selling out.
JIM GOLD, PRESIDENT, SPECIALTY RETAIL, NEIMAN MARCUS: Because she works with all of the collections because she's in a fitting room all day long with her clients. She gets it.
ZOE: Everything has a hint of glitz.
CHO (voice-over): Vintage inspired. Something Zoe is known for.
(on camera): You were inspired in part by the Charlie girl.
ZOE: Yes, I love Charlie girl.
CHO (voice-over): Yes, that's Charlie girl, the '70s is this 40-year- old's favorite decade. Her heroes, legendary designers, Halston and Yves Saint Laurent.
ZOE: And the tailoring is -- I mean, the fit is so tremendous.
CHO: You always say, if it doesn't fit, don't buy it.
ZOE: God, no. Don't. And -- and I stand behind that.
Unbelievable, it's got it.
CHO (voice-over): It's this unguarded love, passion for fashion that gets fans so excited. Now, the stylist to the stars is also a brand and Rachel Zoe isn't stopping at clothes.
ZOE: Home, beauty, more television. Maybe, I mean, just everything.
CHO (on camera): Talk show. ZOE: No.
CHO: Maybe.
ZOE: We'll see. We'll see.
CHO (voice-over): What is certain is that Zoe is a mother first. Her latest venture, a family business.
RODGER BERMAN, HUSBAND OF RACHEL ZOE: Look mommy made this.
CHO: Her husband's the president, her new son, Skyler, the heir apparent, that's if he's interested. Zoe says styling is still her first love.
ZOE: I always say, I think I'll be dressing Jennifer Garner when I'm 75, I really do. I actually think she'll actually -- she'll have a premier and I'll be like, ok, I'm coming. I'm really dying (ph) but I'm coming I'll got to go see my grandchildren first.
(END VIDEOTAPE)
CHO: Great sense of humor.
You know Zoe's love of styling started as a child way back when she was just eight years old. She apparently noticed that one of her male classmates was wearing soccer uniforms every day and she didn't approve of that. So she knocked on his door and laid out outfits head to toe Monday to Friday and she says he actually wore them.
Now, of course, she wasn't paid for that job, but voila a stylist was born.
VELSHI: And I'm sure that was -- that was sort of a blank slate taking a guy who wears soccer uniforms everyday and getting him to wear regular street clothes.
COSTELLO: Yes but --
ROMANS: Good point.
COSTELLO: Convincing a boy to do that, that's a tough personality.
VELSHI: That was interesting, that's true.
CHO: It is, it is, you know, the interesting thing. We talk about the Charlie Girl, you love the Charlie girl, she loves the Charlie girl back in the '70s.
VELSHI: Yes.
CHO: One decade she really does not like. The '80s. She said, I look back at my pictures from the '80s.
ROMANS: Oh it's terrible. CHO: It is terrible and she says I looked back at those photos and I said to my parents, why didn't you tell me not to wear this? And they said, we tried but you didn't try hard enough.
VELSHI: I wore -- I wore a tuxedo to a prom once that had piping.
ROMANS: Nice.
CHO: That's not bad but did the shirt have ruffles?
VELSHI: Yes, yes.
ROMANS: Oh.
VELSHI: And if you were going to live it, live it. You know what, if you were going to be in the '80s, don't pretend you didn't like it, don't pretend you don't like Neil Diamond or don't pretend you don't like Abba, don't pretend you don't like The Village People.
ROMANS: So you're still wearing the tuxedo that's the difference.
VELSHI: I still wear a tuxedo.
ROMANS: All right.
VELSHI: It's really good stuff.
ROMANS: Don't miss Alina's big special this weekend. It's at Saturday September 17th, 2:30 p.m., "FASHION BACKSTAGE PASS."
VELSHI: We're taking a quick break.
(COMMERCIAL BREAK)
COSTELLO: We asked you to talk back, we asked you to "Talk Back" this morning. This was the question. "What would it say to you if Congress took a pay cut?"
This from Kate. "First of all, it won't happen but I think it would be a good idea if these people were not paid -- were not paid so well and given such generous benefits. How can they understand the needs of the people they're serving if they're able to live -- if they are able to live so much better than the rest of us?"
This from Craig, "I think it would be a great idea if they'd took a pay cut. The only problem is hey, they wouldn't do it because it was patriotic or the right thing to do, they would do it because it would make them look good and hopefully increase their chances for re- election. That's the only driving force behind anything they do."
And this from Gary, "For the record, $174,000 per year is not an extravagant salary in the United States today when you consider the level of responsibility of members of congress. With this said, a voluntary pay cut would be a great symbolic gesture, saving $100 million over ten years is trivial compared to the size of our deficit. Maybe we should be focusing on the larger causes of the deficit." Big response to this morning, over 300 comments. People feel passionately about it.
VELSHI: There are people who think, not the right thing to do.
COSTELLO: Not many but there are a few.
ROMANS: How about I don't care what you pay them, just make sure they're doing a good job and not driving the economy off the cliff.
VELSHI: I'm surprised that we didn't get a commission suggestion to get paid based on what you achieve.
That's it for us. We will be back here tomorrow morning at 6:00 a.m. and we'll all be here at 5:00. But for now we're handing it over to Kyra Phillips in the "CNN NEWSROOM". Good morning -- Kyra.
