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American Morning
Media Continues Questioning Herman Cain about Sexual Harassment Charges; Former Penn State Football Coach Accused of Child Molestation; Greek Prime Minister Steps Down; Penn State Rocked by Scandal; Record Quake Rocks Oklahoma; Big Apple's Big Gamble; Greece Prime Minister to Resign; Berlusconi Clings to Power; Child Sex Abuse Scandal at Penn State; Women Only Tent at "Occupy Wall Street"; Casino Comes to Big Apple; Lindsay Lohan In and Out of Jail; Mark Zuckerberg Heads Back to Harvard; Bank of America Crusader Out Of Work; Europe in Crisis; Interview with Niall Ferguson on European Debt Crisis; Most Americans Have $5,200 Held in Checking Accounts; It's a Great Time to Refinance a Mortgage; 20th Anniversary of Magic Johnson Announcing He Has HIV
Aired November 07, 2011 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN ANCHOR: Horror in Happy Valley. Penn State University rocked by a child sex abuse scandal. The accused, a former longtime coach. The fallout this morning, two school officials forced to step down for allegedly lying to a grand jury to cover it up.
ALI VELSHI, CNN ANCHOR: A continent in crisis. Greece on the brink and now two prime ministers reportedly on their way out. Why Italy's prime minister this morning may be the next to go.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Mr. Cain, the attorney for one of the women who filed sexual harassment complaints against you --
HERMAN CAIN, (R) PRESIDENTIAL CANDIDATE: Don't even go there.
(END VIDEO CLIP)
CAROL COSTELLO, CNN ANCHOR: Herman Cain clamming up, refusing to discuss the sexual harassment allegations that continue to hound his campaign.
ROMANS: Plus, is it time to refinance your mortgage? Interest rates are at historic lows and that could save you hundreds of dollars every single month. But there's also the fine print. Find out if it's worth the time and money and who's benefiting most from all this refinancing on this AMERICAN MORNING.
VELSHI: Good morning. It's Monday, November 7th. Welcome to AMERICAN MORNING.
COSTELLO: Up first this morning, the horrible scandal that's rocking Happy Valley. Jerry Sandusky, a former Penn State football coach for more than two decades, facing multiple counts of child sex abuse this morning.
And there's a new development. Late last night Penn State's athletic director and the university's senior vice president for finance and business resigned. They're both facing perjury charges, and now some people are questioning how legendary coach Joe Paterno handled this highly charged case.
Jason Carroll joining us live this morning from state college, Pennsylvania. And Jason, Joe Paterno, he's a legend, but some people say he knew about these allegations a long time ago and told the wrong person.
JASON CARROLL, CNN NATIONAL CORRESPONDENT: Well, you know, Carol, there are so many questions surrounding this investigation. Joe Paterno, such a respected figure here in this part of the state. His statue, in fact, right behind me.
But let's just sort of set the scene in terms of what's happened in terms of the latest developments. Late last night, Penn State board of trustees held an emergency meeting. Following that meeting, you had the resignation of those two school officials facing perjury charges. Those school officials, Carol, expected to turn themselves in later today.
But make no mistake, carol, the focus of this investigation is on Jerry Sandusky.
(BEGIN VIDEOTAPE)
CARROLL: He's a legend in the world of college football. For 23 years, Jerry Sandusky served as defensive coordinator for the Penn State Nittany Lions. Now he's out on bail and defending himself against charges he sexually abused young boys, one as young as eight- years-old. Two other Penn State officials accused of covering up one of the alleged incidents resigned in the wake of the scandal. Sandusky's lawyer says his client is innocent.
JOSEPH AMENDOLA, JERRY SANDUSKY'S ATTORNEY: Jerry's very, very depressed. He's very upset. He's very distraught about the charges, the allegations, and the knowledge that regardless of whether he is eventually proves his guilt or innocence that people are going to think that he did this stuff.
CARROLL: Pennsylvania's attorney general calls Sandusky a, quote, "sexual predator." The 23-page grand jury report lays out in graphic detail how he allegedly targeted eight boys ranging in ages from eight to 14. Prosecutors say the boys were victimized between 1994 and 2009. In one case a graduate student testified he discovered Sandusky sexually abusing a boy estimated to be 10-years-old in the shower of the Penn State football building. The student reported it to Penn State's head football coach, Joe Paterno, who, in turn, told his immediate supervisor, the athletic director, Timothy Curley. It was also brought to the attention of Gary Schultz, a university senior vice president.
Prosecutors questioned why none of the men reported the incident to police, which is required under Pennsylvania law. Both Schultz and Curley are charged with perjury for allegedly lying to the grand jury. The two men testified they were under the impression Sandusky was, quote, "horsing around" with the boy in the shower. Both men resigned late Sunday, the board of trustees releasing a statement saying "Under no circumstances does the university tolerate behavior that would put children at risk."
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Let me just say something about it. You know, there is a big moral issue about the behavior of Penn State here, about their failure to act. But the legal issue is whether they lied.
CARROLL: According to the grand jury report, all of the alleged victims came into contact with Sandusky through his charity, The Second Mile.
JERRY SANDUSKY: The Second Mile is a non-profit organization that reaches out to serve young people throughout the state of Pennsylvania.
CARROLL: Sandusky and his wife formed The Second Mile in 1977 to help troubled boys. He retired from coaching in 1999 but still had access to Penn State's facilities. So popular, he wrote an autobiography in 2001 entitled "Touched -- The Jerry Sandusky Story."
(END VIDEOTAPE)
CARROLL: And, Carol, Sandusky is currently out on $100,000 bail. He's expected to make another court appearance on Wednesday. And later today we're expected to hear from the attorney general at that point. We are waiting to hear more details, and we'll have some more of our questions answered about this particular case. Carol?
COSTELLO: All right, Jason Carroll reporting live for us this morning. Thank you.
VELSHI: Major developments this morning in the political and financial crisis that is consuming Greece. A transfer of power is now underway after that country's prime minister agreed to step down even though he survived a confidence vote on Friday night. The hope is that a new unity government will help Greece secure more European bailout funds and avoid defaulting on its massive debt.
And there is also growing concern right now about the financial stability and the future of Italy. Reuters and "Bloomberg" are reporting that two journalists close to Italian Prime Minister Silvio Berlusconi say the leader is on the verge of stepping down. Joining me live from Rome, Italy, is Matthew Chance. Good morning, Matthew. What's the situation on the ground there?
MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT: Well, if he is stepping down, he's keeping it very close to his chest, at least publicly, because we've just spoken to the press office of the prime minister, Silvio Berlusconi, and they're denying that he's intending to do that. Instead, what we will see over the course of the next few days is a lot of pressure to be brought down on Silvio Berlusconi as he faces a crucial parliamentary vote tomorrow on plans for the 2010 budget, so -- for last year's budget, which still has to be passed. If he fails to get the majority in that parliamentary vote tomorrow, then we could see some kind of movement in terms of him staying on in power, Ali.
VELSHI: Matthew, obviously, the implications of Italy defaulting are substantially more serious than Greece. Is there some sense that -- you know, Carol asked this a question a few minutes ago, and it's a very good question. What gets achieved in solving Italy's massive financial problems by Berlusconi stepping aside, if that rumor turns out to be true?
CHANCE: Because Italy's problems, Italy's economic problems are essentially about the lack of credibility that Silvio Berlusconi has in the eyes of the people of Italy, in the eyes of the markets, that he's the right person, that he has the political strength to push through the tough austerity measures the country needs to get its economy back on track. He just doesn't have the parliamentary support to do that.
And so what the markets want to see is somebody else, a more credible figure, to move into place and to impose those austerity measures, try and bring the Italian debt, which is something like $2.6 trillion, more than Greece and Spain and Portugal and Ireland combined, from being under control, Ali.
VELSHI: We'll stay on top of it with you. Thank you very much, Matthew Chance, in Rome for us.
ROMANS: It's day two of jury deliberations in the Michael Jackson death trial, and no verdict after the first full day of deliberations on Friday. Katherine and Joe Jackson anxious to learn the fate of Dr. Conrad Murray. They even got a hotel room to be near the courthouse. The jury must decide did Murray give Jackson that lethal dose of Propofol? Casey Wian is joining us live from Los Angeles, very early this morning in Los Angeles. Good morning, Casey.
CASEY WIAN, CNN CORRESPONDENT: Good morning, Christine. Yes, the jury deliberated for seven hours and 40 minutes on Friday. They'll get back at it in about four hours from right now, again, this morning. Of course, the key question they are trying to decide, did Dr. Conrad Murray deliver that fatal dose of Propofol to Michael Jackson? The defense claims that Michael Jackson was a drug addict and possibly injected himself with the Propofol. The prosecution says even if that is the case that Conrad Murray is still liable for Michael Jackson's death basically because he has added responsibilities as a doctor.
Now, outside the courtroom, we saw some verbal scuffles among supporters of Dr. Conrad Murray and Michael Jackson's fans on Friday. And, frankly, a lot of those scuffles were probably ramped up a little bit by the presence of television news cameras. I counted 45 cameras outside the courthouse at one point on Friday. Michael Jackson's fans saying on some blogs and on the Internet this morning that they're going to plan a more somber attitude, more reverential tone, perhaps a candlelight vigil later today. And as you mentioned, Michael Jackson's family again expected to gather at a hotel near here so they can be close to the courtroom and be in the courtroom when that verdict is finally reached. Christine?
ROMANS: All right, Casey Wian in Los Angeles. Thanks, Casey.
COSTELLO: Herman Cain is having a very hard time keeping everyone focused on his campaign. He's refusing to discuss sexual harassment allegations that continue to dog him at every step. And even though he's ordered the media not to bring it up, the questions persist.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Mr. Cain, the attorney for one of the women who filed sexual harassment complaints against you --
CAIN: Don't even go there.
UNIDENTIFIED MALE: Can I ask the question?
CAIN: No, because -- where's my chief of staff?
UNIDENTIFIED MALE: Right here.
CAIN: Please send him the journalistic code of ethics.
(END VIDEO CLIP)
COSTELLO: Cain may not want to discuss the sexual harassment accusations, but his Republican rivals do. Jon Huntsman says it's causing a distraction for all the candidates, and he's calling on Cain to come totally clean.
VELSHI: Still to come this morning, more on the child sex abuse scandal at Penn State. Why legendary football coach Joe Paterno could get caught up in this controversy.
ROMANS: And no longer just tornado country. Oklahoma gets rocked by a record earthquake and then dozens of aftershocks. A TV news anchor on air, live as the ground shook. We'll have that video for you.
COSTELLO: And 20 years ago today Magic Johnson shocked the nation, announcing his retirement from the NBA because of HIV, what we all thought at the time was a death sentence. We'll find out how he's doing and what his life is like now.
It's 11 minutes past the hour.
(COMMERCIAL BREAK)
COSTELLO: It's 14 minutes past the hour. Welcome back to AMERICAN MORNING.
More now on that ugly scandal that's rocking Penn State's legendary football program. Jerry Sandusky, a former defensive coordinator for the Nittany Lions for more than two decades, charged with sexually abusing eight boys. And now the university's athletic director and a senior vice president have stepped down after being accused of lying to a grand jury to cover it up.
Mark Viera joins us live from state college, Pennsylvania, this morning. He's a contributor to "The New York Times." He's been covering this case quite closely. Welcome.
MARK VIERA, CONTRIBUTOR, "THE NEW YORK TIMES": Thank you for having me.
COSTELLO: The charges are horrifying enough, but what's also disturbing is that the staff, the athletic director and the senior vice president, they allegedly heard from witnesses who saw this abuse, yet they failed to report it to police as is required by Pennsylvania law. Were they trying to cover it up? Were they ignoring the problem? What was happening with them?
VIERA: I really can't speak to what their motives were, but it seems that when they were presented with this evidence, they got together, they huddled, they met with some higher-up officials, including President Graham Spanier, who was notified in some form or fashion about what they had heard from a graduate assistant who allegedly had seen this 2002 incident.
Perhaps in not saying it, they simply were hoping that it would just go away. And clearly, it didn't, and clearly, the problems persisted. And obviously, it all sort of came to light on Saturday morning when the charges came down.
COSTELLO: But the witness saw this suspect in the shower with a 10-year-old boy. It couldn't be more explicit than that.
I want to talk about the head coach, Joe Paterno, because this witness told Joe Paterno - Joe Paterno told the athletic director, but he didn't go to the police. Is he required to go to the police?
VIERA: Under Pennsylvania law, he technically is in the clear in this because he presented it to his supervisor. How Penn State has laid it out, including Scott Paterno, the son of Joe Paterno, who I spoke with last night, what they're saying is that the graduate assistant who saw this 2002 incident you're referring to didn't describe in exact detail what he had seen.
Perhaps it was just horseplay was what was conveyed to Paterno, which is why he felt comfortable passing it to his superiors, as opposed to just - as opposed to reaching out to the authorities, for example. However, a lot of people look at that and say that's sort of flimsy. Anything that's involving a 76-year-old man and a 10-year-old boy in a shower, whether it was horseplay or something more severe, as it's alleged to be, probably needed to be brought to the authorities first and foremost, in addition to his superiors.
COSTELLO: I think - and I think most parents would agree with you. The other, just bizarre thing about this, is university officials didn't bother to find out who this boy was.
VIERA: There are a lot of unanswered questions in this, and I think that's what's been the most startling and stark thing for a lot of people to come to grips with and sort of put their head around, as they've read the grand jury report.
There's so many questions unanswered, for example like the one you posed to me. OK, why didn't - why didn't you go to the police about this first? Why didn't you even mention it further? Why didn't the president feel that it was worthy of following up? Who knew what when, and to the extent of what happened, what were they aware of happened that - what were they aware of what happened at certain times?
I think there's a lot of unanswered questions and it's all still very much unclear.
COSTELLO: A lot of people are wondering, you know, this is just another sign that college football is just too - too powerful. I mean, there's nothing you can do to hurt it because it brings universities so much money, and maybe it's best to cover up something like this, because you don't want to hurt a college football program, especially one like Penn State's, who's been untouched by scandal.
VIERA: I think that's the thing that's in all this that makes it the most startling, is in Joe Paterno's 46 years as the head coach, dating back to 1966, the program has established a stellar reputation. It is one of four major universities that's never had major sanctions by the NCAA in terms of recruiting violations - and recruiting violations and these things.
And Penn State, frankly, has been very proud to sort of hold itself to that higher standard and sort of like to think of itself as carrying itself above the fray. And this, obviously, has sort of pierced that notion, and that's what's been the most difficult thing for a lot of people to come to grips with, is that maybe this institution that they've held in such high regard wasn't - wasn't as perfect as everyone had believed it to be from the outside.
COSTELLO: And quickly, with that in mind, I know these two university officials have stepped down, but should we expect more university officials to step down in the days to come?
VIERA: Again, I think that goes back to some of the unanswered questions about who knew exactly what and when. I think as some of those questions, hopefully, get cleared up, as the legal process continues, we'll have a lot better indications.
But I will say this. At the highest levels of the university, the President Spanier and Coach Joe Paterno, I certainly think that there are going to be fierce questions opened up to them and their futures.
Like I had mentioned earlier, Tim Curley and Gary Schultz, or some combination of that group, had alerted them in some form or fashion, whether that was some sort of formal memo or letter or whether that was an informal conversation about what they knew about the 2002 incident. Spanier sort of wiped - seemed to have sort of wiped his hands of - of culpability in that - in that whole scenario.
COSTELLO: Right.
VIERA: So, I think going forward, that that's going to be a big issue. And I think also, with - with Joe Paterno, he's 84 years old. He's coached here for 46 seasons. I think a lot of people before any of this stuff happened were wondering very loudly whether this could be his last year. And now with all this as sort of the backdrop, we certainly have to wonder how much longer he has for the job.
COSTELLO: Mark Viera, sports contributor to "The New York Times," thanks so much for joining us this morning. We appreciate it.
VIERA: Thanks a lot.
ROMANS: How long this has taken? That 10-year-old boy today would be 19 years old.
VELSHI: Yes.
ROMANS: So, all of this time, while this child grew up with this scandal sort of simmering, or at least completely out of public view, 40 counts - 40 counts. He faces a maximum of life in prison if he's found guilty of all these counts.
VELSHI: Yes.
COSTELLO: It's just - and you just wonder about the children, like what effect - I mean, if these charges are true, what effect that this stuff has had on these children -
VELSHI: Yes.
COSTELLO: -- who are now, you're right, adults.
VELSHI: They're college age, yes.
ROMANS: All right, a weekend of aftershocks after a rare and powerful earthquake rocks Oklahoma. The 5.6 quake struck near Sparks in Lincoln County late Saturday night. It's the strongest ever in that state. This only hours after another large quake hit the same area.
Tremors reportedly felt in Texas, Arkansas. Central Oklahoma experiencing more than 30 aftershocks. Several homes were damaged pretty severely.
Local news anchor Ed Murray from KWTV, he was on the air when the ground shook. Take a look.
(BEGIN VIDEO CLIP) ED MURRAY, ANCHOR, KWTS: Another earthquake has just hit. I still hear a few lights rattling here in our studio, and we will - we still have our - if you can see our Duratran back here, I don't know if you can see it behind us, still shaking here in Oklahoma City.
(END VIDEO CLIP)
ROMANS: At least one person suffered minor injuries.
VELSHI: All right. Still to come this morning, anger and frustration over those bank fees are prompting thousands and thousands of people to check out of their banks. So where are they putting their money this morning? We'll tell you on the other side.
COSTELLO: And New York City's first casino finally opens for business, but will gamblers show up in a down economy?
You're watching AMERICAN MORNING.
(COMMERCIAL BREAK)
VELSHI: Hey, 26 minutes after the hour, welcome back. We're "Minding Your Business."
The cue today again comes from Europe. Right now, U.S. stock futures are trading slightly lower. The Greek prime minister has announced he'll step down if it means getting Europe's international bailout approved.
Investors focus also shifting to Italy now and whether it will be a domino to fall on Europe's crisis. The political future of Silvio Berlusconi hangs in the balance ahead of a key parliamentary confidence vote. Italian rates are now about 6.5 percent and investors are worried about that country's financial stability.
Checking out now, an estimated six - estimated thousands of Americans pulled their money from the nation's biggest banks over the weekend as part of Bank Transfer Day. Customers were urged to shift their accounts to credit unions. The grassroots movement caught fire after Bank of America announced its new debit card fee, a fee they eventually scrapped under pressure from customers.
Today, Barnes & Noble is expected to unveil an updated version of its color e-reader, that's the Nook. Right now, the rumor suggests the new device will be more powerful, slightly thinner and cost as same as an Amazon Kindle, $199.
Robert de Niro reportedly wants to add Ponzi schemer to his acting resume. According to reports, de Niro will play Bernie Madoff in the HBO version of "The Wizard of Lies: Bernie Madoff and the Death of Trust."
AMERICAN MORNING back right after the break.
(COMMERCIAL BREAK)
UNIDENTIFIED FEMALE: We're happy.
UNIDENTIFIED FEMALE: I just love it here and I'm so glad it came to New York.
ROMANS (voice-over): The Big Apple opens its first casino, but can it deliver the big payoff? City officials are hoping for it, banking on it on this AMERICAN MORNING.
COSTELLO: And good morning to you and welcome back. It's 30 minutes past the hour. Your top stories now.
Today, Greek Prime Minister George Papandreou is meeting with that country's opposition leader to discuss who will be the next prime minister. Papandreou has agreed to step down as long as lawmakers approve a $130 billion euro bailout deal.
VELSHI: And Italy's growing debt crisis may send that country's Prime Minister, Silvio Berlusconi, packing. Reuters and Bloomberg are reporting that two respected journalists close to the leader believe he's about to step down. Berlusconi's office tells our Matthew Chance in Rome the prime minister's not going anywhere.
ROMANS: Penn State's storied football program rocked by scandal. Former defensive coach, Jerry Sandusky charged with sexually abusing eight boys. The university's athletic director and a senior vice president both stepping down late last night. They're facing perjury charges, accused of lying to a grand jury to cover up this case.
COSTELLO: A big change at "Occupy Wall Street." A women's only tent has been set up for protesters in Zuccotti Park, the home for the movement.
A sign out front calls, "The Women's Tent." It a safe sleeping space. It can hold nearly 15 protesters. The new tent comes after police charged a Brooklyn man with sexually assaulting a woman at the park last week.
VELSHI: And for years, New Yorkers have been forced to drive three hours to gamble in Connecticut or New Jersey, but all that has changed last week when the big apple opened its first casino.
As Richard Roth reports, city officials are betting on Resorts World to bring in some much-needed revenue.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: We're open!
RICHARD ROTH, CNN CORRESPONDENT (voice-over): Start spreading the news, New York City's first ever casino is now open for gambling business.
The city that never sleeps has also been the city that you never could spin a slot machine.
UNIDENTIFIED FEMALE: I love the slots. I just love it here and I'm so glad it came to New York.
ROTH: The Ginting Group, largest gambling operator in England and the Southeast Asia brought Resorts World Casino to New York.
MICHAEL SPELLER, PRESIDENT, RESORTS WORLD CASINO: This is a landmark decision for us to come into the United States.
ROTH: Thousands lined up in the cold on opening day.
UNIDENTIFIED FEMALE: But it's worth it. First one in New York, if we have to wait two hours, we'll be here.
ROTH: It took much longer for this casino to start rolling. Political squabbles and scandal caused lengthy delays. The crowds feel the casino opened not a moment too soon.
UNIDENTIFIED FEMAEL: We're happy.
ROTH: There is the random New York City reference, but once inside, gamblers could be anywhere. The casino is a long subway ride from Manhattan, but easy driving distance for millions of residents.
UNIDENTIFIED FEMALE: I hit it again! I'm so excited!
ROTH: The goal, though, is to bring another $50 million in taxes to the state by keeping customers and cash from going to Atlantic City, Vegas and other casino cities.
UNIDENTIFIED MALE: We intend to keep some of the New York gaming dollars that are leaking out of state right here in New York.
ROTH: At the same time, casino backers hope out-of-towners landing at the nearby airport will be tempted, too.
UNIDENTIFIED MALE: So, when people do come from out of state or even out of the country, right next door at JFK, they land, they're looking for a place to have a good time.
ROTH: It's called a racino, because it's next to aqueduct racetrack where bets have been taken for years. Gambling success isn't guaranteed in New York. OTB, the now shuttered off track horse betting operation was a giant failure. More effective agreements between the company and state may mean success.
CHARLES BRESHER, N.Y. CITIZENS BUDGET COMMISSION: They decided to put these racinos near racetracks because it's more acceptable to have gambling where gambling already was.
ROTH: One problem -- unlike Las Vegas, this place has only video machines for slots and other games. This woman is nice, but she's a cyber roulette dealer. State law, for now, prohibits human black jack and crabs dealers.
UNIDENTIFIED MALE: He's an addict and I'm just a watcher.
ROTH: In a rough economy, gamblers will have to make sure that they don't lose money in a casino they so desperately waited for. Richard Roth, CNN, New York.
(END VIDEOTAPE)
ROMANS: Do you gamble?
VELSHI: I like casinos. I'm not a gambler. I never do well on it, but I like the vibe.
COSTELLO: He likes the vibe. I don't -- I just don't want to throw my money away because I always lose.
VELSHI: Same with me.
ROMANS: Yes. I love poker. I won $186 at poker one night and never played again. The gambling gods will not get me. I'm up $8,600. That's it.
VELSHI: Up for life.
ROMANS: All right, this just in to CNN, Lindsay Lohan is back behind bars.
VELSHI: What?
ROMANS: Yes, and this just in to CNN, Lindsay Lohan has been released from jail.
VELSHI: What?
ROMANS: Lohan checked into and out of a detention facility in Lynwood, California overnight, serving just over four hours of a 30- day sentence for violating the terms of her probation. Officials said she could be released within hours due to jail overcrowding.
COSTELLO: Facebook founder, Mark Zuckerberg is going back to Harvard! The CEO famously dropped out of the Ivy League School. He's returning today to speak with students at a recruiting event for internships at Facebook. This is Zuckerberg's first time back to Harvard since leaving in 2004 to found Facebook.
VELSHI: I would have thought he would have been back for speeches or things like that. Interesting.
A 22-year-old college grad, Molly Katchpole, led the effort to get Bank of America to ditch its proposed $5 debit card fee. Now that the job's done, Molly's searching for an actual job that can help her pay off her college debt.
She currently makes $400 a week at a part-time job and she's got some $40,000 in student loans, says she's been looking for work with some left-leaning non-profit organizations.
If I were a left-leaning non-profit organization, I'll get Molly Katchpole in there fast. That was one of the most effective campaigns a regular person with no connections to anything has ever conducted. COSTELLO: And she's so enthusiastic and motivated.
VELSHI: Yes.
ROMANS: And eloquent, too.
All right, still to come this morning, the European debt crisis grows as a new superpower emerges in the east. So, how bad is the Western Europe and the U.S.? How bad is the old guard west losing? We're going to ask Neil Ferguson, you know, an award-winning author on the subject.
COSTELLO: And 20 years ago today, a shocking announcement. Basketball legend, Magic Johnson contracted HIV, and he announced he was retiring from the NBA. Still ahead, what's life like for Magic today? It's 36 minutes past the hour.
(COMMERCIAL BREAK)
ROMANS: Good morning, New York City. It is sunny and 44 and later today, it's going to be sunny and 62. And Rob Marciano told us it will be the same weather in New York as in California. Rare for November. Welcome back.
Just as Greece takes steps to, at least temporarily get a better handle on its debt crisis, Italy is now teetering. And we're hearing reports that Prime Minister Silvio Berlusconi may be on the verge of resigning.
Although his Facebook page this morning says he will not be resigning, a very singular kind of political figure who announces such things on a Facebook page.
But joining me now is Niall Ferguson, author of "Civilization: The West and The Rest." He's also a columnist at "Newsweek" and "The Daily Beast." The book is a fascinating read, as all of your works are.
NIALL FERGUSON, AUTHOR, "CIVILIZATION: THE WEST AND THE REST": Thank you.
ROMANS: But let me talk first about Greece and Italy. I guess, let's start with Italy here, all this pressure on Silvio Berlusconi.
There's pressure on him to resign periodically for any number of scandals that he's involved in, but this is a bond market. These are investors in the world looking at this potentially as the next domino. What's happening there?
FERGUSON: You couldn't asked for more if you had just written a book on the decline of western civilization to have governmental collapses in both Greece and Italy, the cradles of western civilization.
The Italian case, it's clear, it's the end of the line for Berlusconi, because he seems to be standing between Italy and the kind of reforms they have to make, if international investors are to be reassured.
I mean, this isn't the danger zone. Italy's borrowing costs are up where Portugal's and indeed Greece's and Spain's were before they really got into dire straits. So it was high time he left.
He should have gone long ago to make way for somebody more credible like Mario Monti (ph) who I wouldn't be surprised if we say him in his role within a matter of weeks.
ROMANS: And at this hour, he is still holding on.
FERGUSON: In a classic fashion.
ROMANS: You know, and we'll see. I'll tell you. This is the third largest economy in Europe. This isn't a Greece.
FERGUSON: No.
ROMANS: Italy is something that -- when you look in all of the dominos, this is a serious issue.
FERGUSON: Well, Greece is to Europe what Washington State is to the United States, but Italy is more like Texas or California. This is a really big economy and it's thought of as one of the cores of the European Union.
So, this is really a sign that Europe is in dire straits, and I think we have to look ahead to further crises because it's very hard for the Europeans to solve this problem.
If you create a monetary union with such incompatible economies, Germany at the core, the periphery not really competitive, something's got to give and it's not clear to me what it will be. It's very hard for countries to leave the euro zone and it's very hard for the Germans to bail them out.
ROMANS: And we knew at the invention of this experiment in Europe that there would be moments like this where at some point, these countries were going to have to merge together closer with some of their other, you know, other governmental arms.
You can't just have different bond markets, but the same rate-setting poll -- different rate-setting policies, the same currency. Is this the crisis that moves them together or does it break them apart?
FERGUSON: I don't think it's at all clear that they can go to the next level of being a federal state like the United States.
ROMANS: Right.
FERGUSON: Ten or 11 years ago, Larry and I predicted the degeneration of the monetary union after about 10 years because of this fundamental mismatch.
So, it's going to be very interesting to see what happens next, but I wouldn't be at all surprised to see this get worse before it gets better.
ROMANS: All right, so what a perfect time to be writing a book about civilization, because -- and the declines of civilizations, what makes them great.
Talk about the west and the rest, how we got to this point and how the rest of the world is now, I guess beating us at our own game, if not better.
FERGUSON: Well, there was a time when Europe was the most dynamic place in the world, and it was, indeed, the expansion of Europe after around 1500 to the new world, to North America.
That was probably the biggest story of the last half millennium in terms of economic history and political history, because these European countries not only emigrated, but they created huge empires.
And transformed almost every field of human activity, including, for example, science and the way we do business. So, it's fascinating to watch Europe unravelling in this way because it seems to me to signal the end of an era after what, 500 years?
It's no longer a western-dominated world. Pretty soon, the U.S. won't be the biggest economy.
ROMANS: Right.
FERGUSON: Pretty soon, we'll be looking not only at the disintegration of Europe, which I think is the big story now, but the ascent of Asia and the rise of China into position of real dominance.
I thought it was highly significant that just the other day the Europeans went cap in hand to Beijing, saying, please, bail us out! I mean, Europe asking for aid from China? That's amazing.
ROMANS: Remember the middle of the heated financial crisis here it was China bailing out some American banks, too, with big investments, although they lost a lot of money on those investments, the Chinese did.
FERGUSON: Yes, and they haven't forgotten, which is why they're not about to write Europe a big check.
ROMANS: What about the U.S. and China? So many people have long said that capitalism will bring to China democracy and more human rights and more opportunity for people.
But we've seen China spending half a trillion dollars a year to invest in the areas of its economy to out-compete us. In the United States, we argue about whether we're going to spend $30 billion a month for unemployment benefits. It's playing offense and defense, these two countries.
FERGUSON: It's true. I mean, in civilization, I argue that there were really six killer apps that set the west apart from the rest, ranging from competition in the economy through to scientific innovation.
And in almost all those measures, China is now pulling ahead. For example, we assume that we do the innovation and they just sit on an assembly line, but it's not true anymore.
Increasingly, China is an innovative economy, pouring huge resources into research and development. The only real difference, and this is really the key to your question, is that they have no desire to go down our political route towards democracy.
They don't even want the kind of rule of law system that we developed even before we became full democracies, and that's going to be the big difference. The only real difference -- and this is really the key to your question -- is that they have no desire to go down our political route towards democracy. They don't even want the kind of rule of law system that we developed even before we became full democracies, and that's going to be the big difference. Can China run this kind of a capitalist economic model with a one-party state? That's really the big question of the 21st century.
ROMANS: You don't think it's a slam dunk that they are the world's leader?
FERGUSON: Oh, no, because there are all kinds of problems, demographic and environmental problems, and ultimately political problems. If you create the biggest middle class in the world but say, no, you don't have any political choices -- it's still a Communist state -- at some point, you get pushback.
ROMANS: Yes. You give all those people a job to keep them from rioting in the streets and overthrowing your government but, at some time, with the job, they will want rights and a voice, too.
FERGUSON: Right. Exactly.
ROMANS: Niall Ferguson, very nice to see you.
FERGUSON: Thank you very much, indeed.
ROMANS: Thank you so much.
FERGUSON: All right, morning headlines next. Plus, today's "Romans' Numeral," $5,200. Here's a hint. Check your piggy bank.
Forty-five minutes after the hour.
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COSTELLO: Thirteen minutes until the top of the hour. Here are your morning headlines.
Stocks are struggling this morning. Right now, the Dow, NASDAQ and S&P 500 futures all trading lower. Investors still nervous, despite the formation of a new Greek government. Investors also shifting their attention to another debt-burdened country. That would be Italy. Prime Minister Silvio Berlusconi's office is denying reports the leader is on the verge of stepping down.
Penn State's athletic director and a senior vice president have stepped down. They're facing perjury charges. Prosecutors say they lied to a grand jury to cover up child sex abuse charges against former Nittany Lions defensive coach, Jerry Sandusky.
Verdict watch in the Michael Jackson death trial. It is day two of deliberations. Jurors must decide if Dr. Conrad Murray gave Jackson a lethal dose of Propofol. If convicted, the doctor faces four years in prison.
80,000 residents still without power in Connecticut. This, more than one week after a snowstorm slammed into the area. Connecticut Light and Power missing its self-declared deadline to restore electricity by midnight.
Former heavyweight boxing champ, Joe Frazier, is fighting liver cancer at a Philadelphia hospice. His manager says he's seriously ill. The 67-year-old Smokin' Joe went toe to toe with Muhammad Ali three times in the '70s and he was the first fighter ever to defeat him.
That's the news you need to start your day. AMERICAN MORNING, back after a break.
(COMMERCIAL BREAK)
VELSHI: Good morning, Atlanta. Oh! You must be waking up thinking, is this Atlanta?
(LAUGHTER)
VELSHI: It's 27 degrees.
(CROSSTALK)
VELSHI: Who moved me overnight to Massachusetts? Don't worry, Atlanta. It is Atlanta, which means the sun is coming up and it will be 71 degrees.
ROMANS: This morning's "Romans' Numeral," a number in the news today, the number is $5,200.
VELSHI: Five ounces of gold.
ROMANS: No.
VELSHI: No.
ROMANS: Believe it or not, this is how much the average checking account contains.
VELSHI: Really?
ROMANS: That according to a research firm. And it means many customers simply can't afford those monthly charges by the big banks. So this is a number kind of behind the outrage about big banks nickeling and diming you to death. And this week was Bank Transfer Day, so pretty soon we will know exactly how much people are keeping in their pocket by going to a credit union.
VELSHI: Good move though to remind people that the only impediment to them not paying fees is moving your account. But that's difficult.
(CROSSTALK)
VELSHI: I mean, thinking about 10 years, tops.
COSTELLO: I was talking to someone in the newsroom the other day that the big banks don't really care that people with smaller -- you know --
VELSHI: Right. People with $5,000 in their account, right.
COSTELLO: People with smaller -- right. Go ahead and move it because it costs us more to maintain your checking account with your measly $5,000 in it.
(LAUGHTER)
ROMANS: Yes, and some of the big banks are now really trying to appeal to people with more wealth.
VELSHI: Yes.
COSTELLO: They are setting up the new storefronts for people who have more than $5,000 to invest.
ROMANS: But speaking of money in your pocket, we've been telling you that now is a great time to refinance your mortgage. But it's not easy. I want to be clear about that. If you are underwater, that means you owe more than it's worth, you don't qualify. If you don't have a good credit score, ditto. But it is real money, hundreds of dollars in savings a year if you can get -- if you can tough it out and get it down. The experts say you have to shop around. Don't just turn to your existing mortgage lender and ask to refinance. You might be losing out there. It's easy, but it could costs you more in the end.
I recently spoke with Bob Moulton from Americana Mortgage, who said shopping local is key to getting the best terms on a refinance.
(BEGIN VIDEO CLIP)
BOB MOULTON, PRESIDENT, AMERICANA MORTGAGE: If you are going to shop around, try to stay with a lender that is local or get someone that is going to be referred to you. The best source to get a new mortgage is work with someone who is in the business and understands the local market and knows how to get the deal done. The rate is important, but qualifying is even more important.
(END VIDEO CLIP)
ROMANS: And some of the big banks are so overwhelmed with foreclosure activity that they're not really doing refinances as fast.
And before you can also even think of refinancing, you have to clean up your credit. Check your credit reports for free at annualcreditreport.com. Fix any mistakes.
A lot of people have mistakes and don't even know they are there.
VELSHI: Yes.
ROMANS: Because mistakes will pull down your credit score. You also need to know that you need 700-plus for the lowest rates. You need cash on hand. Lenders want to see you have three to six months of mortgage payments saved away. If you don't have money stashed away, they're not going to let you refinance. Also, pick the loan term that is right for you. Is it 13 years, 30 years? An adjustable rate maybe? Those rates are so low, you can't believe it.
Lynette Khalfanie-Cox is the founder of askthemoneycoach.com.
(BEGIN VIDEO CLIP)
LYNETTE KHALFANIE-COX, FOUNDER, ASKTHEMONEYCOACH.COM: If you are in your 50s, don't get another 30-year loan and you've already paid down 10 years. Refinance to a 20 or 15-year loan.
ROMANS: Right.
KHALFANIE-COX: If you're trying to pay off credit card debt and that's the reason why you're refinancing, maybe not a smart strategy actually if you haven't controlled your spending problem or you don't know how to work a budget.
(END VIDEO CLIP)
ROMANS: Are you going to move in two or three years for your job? You need to think about that too. How long are you going to stay in the home and what monthly payment can you afford? You also need to be ready for potentially thousands of dollars in fees and closing costs. Remember all the hoops when you took out the mortgage? You are going to do it all over again. So do the math and make sure it's right for you.
VELSHI: It could still be worth it though.
ROMANS: Yes.
VELSHI: For all of the effort and those numbers --
(CROSSTALK)
ROMANS: I really think it is.
VELSHI: The point is, rates have dropped so significantly in the last year and a half that it's --
(CROSSTALK)
COSTELLO: You know what's happening now though? We have applied to refinance.
VELSHI: Yes.
COSTELLO: So, but it's taking the banks so long to get back to us --
VELSHI: Yes.
(CROSSTALK)
COSTELLO: -- and like the rate is going up. So by the time the bank contacts us -- because we have sent in all of our information, right?
VELSHI: Yes.
COSTELLO: By the time the bank contacts us --
(CROSSTALK)
ROMANS: -- already has your mortgage?
COSTELLO: No. It's a different bank.
(CROSSTALK)
VELSHI: Yes, you just have to be on it. It's definitely one of those things that doesn't move as quickly as you'd like it to move but could be --
(CROSSTALK)
COSTELLO: Well, I'm just going to stalk them today --
VELSHI: Yes.
COSTELLO: -- until they answer me.
(CROSSTALK)
VELSHI: Tell them Velshi and Romans said so.
COSTELLO: Thank you.
ROMANS: One of the producers, she said it was like another full- time job. She would leave here and she would go -- and this took two or three or four months and it was every day, hours and hours of --
(CROSSTALK)
VELSHI: Remember the old days, when they used to approve your mortgage that day and had it done within a week?
(CROSSTALK)
ROMANS: They didn't ask if it was you or how much money you made.
VELSHI: Right.
ROMANS: But that's what caused this whole problem. Anyway, there you go.
COSTELLO: So I'm going to go through the agony.
(CROSSTALK)
ROMANS: It's agony. It's agony. But it's worth it in the end.
COSTELLO: I hope so.
(LAUGHTER)
Twenty years ago today, basketball great, Magic Johnson, made this shocking announcement that stunned the country.
(BEGIN VIDEO CLIP)
MAGIC JOHNSON, BASKETBALL PLAYER: Because of the HIV virus that I have obtained, I will have to retire from the Lakers today. I just want to make clear, first of all, that I do not have the AIDS disease that a lot of you are -- want to know that, but HIV virus.
(END VIDEO CLIP)
COSTELLO: Johnson is still HIV positive, but managed to keep the condition from developing into full-blown AIDS.
Senior medical correspondent, Elizabeth Cohen, joins us live in Atlanta.
So, Elizabeth, how is Magic Johnson's health 20 years later?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Carol, by all accounts, doing well. He told "The L.A. Times" this weekend, I'm not cured, but the HIV is asleep, deep in my body. And he said his T-cell count, which is an indicator of the virus, is doing well. And he has continued his activism, getting people to get tested for HIV and take care of themselves and taking the stigma away from the disease.
VELSHI: Here's the thing. He's done a great job of doing that and reaming active and healthy and getting into business. How much of this has to do with the fact that he was able to -- he had the resources for this. Can other people who get HIV stay healthy for 20 years?
COHEN: That's a great question. Let me go back in town in order to answer it. So he announced in 1991 that he was HIV positive. He got the anti-retroviral drugs, the drugs that saved so many lives, in '94, about a year-and-a-half before the general public. And that definitely helped. He had access to those drugs before other people did.
Now, if you are asking about, now is he -- has he survived because he has money and whatnot, well, insurance pays for the drugs, so even ordinary people with HIV do have access to those drugs if they have insurance.
ROMANS: All right, along with drugs in treating this, because we've learned so much about this virus and then the onset of the disease than when knew he announced.
COHEN: So much. When he announced that he had HIV, I mean, HIV, in many ways, was a death sentence. And the drugs, when they came out in 1996, saved countless lives. And they've learned much more since '96 about how to combine them. He takes three pills a day. He says he won't say which ones, because the mix of pills is different for everyone.
Another advance, Christine, has been testing. You can get tested now in 20 minutes. You can do it in many places. And over a million people in this country, Christine, are living with AIDS -- HIV, rather, and one in five don't know it. That's really dangerous. It's dangerous for that person because it means they can't start taking drugs. And it's dangerous for their sexual partners. They could be spreading the virus and not know it.
COSTELLO: Thanks, Elizabeth Cohen.
COHEN: Thanks.
VELSHI: All right, your top stories are next, including Herman Cain refusing to answer questions about those sexual allegations against him, but can he possibly keep his campaign on message, as he says he trying to do?
It's 58 minutes after the hour.
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