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The Situation Room
Senators Grill Goldman Sachs Executives; Flight Diverted
Aired April 27, 2010 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Harrowing moments for travelers, as a transatlantic flight is diverted to Maine, and one passenger is let off for questioning after an alleged threat.
And an American cleric who's on a U.S. hit list showing up in a new al Qaeda video, while another video seems to show the alleged Christmas Day underwear bomber training with al Qaeda. Is there a connection?
I'm Wolf Blitzer. We want to welcome our viewers in the United States and around the world. You're in THE SITUATION ROOM.
It's not often these days that U.S. senators on opposite sides of the aisle are seeing eye to eye, but there was bipartisan fury today directed at officials of the giant Wall Street firm Goldman Sachs.
Democrat Carl Levin led the charge, accusing the company of unbridled greed for betting against the nation's housing market as the economy was unraveling. But, in dramatic testimony, current and former Goldman Sachs officials stood their ground. Listen to this.
(BEGIN VIDEO CLIP)
SEN. CARL LEVIN (D), MICHIGAN: Surely, there's no law, ethical guideline or moral injunction against profit. But Goldman Sachs it didn't just make money. It profited by taking advantage of its clients' reasonable expectation that it would not sell products that it did not want to succeed and that there was no conflict of economic interest between the firm and the customers that it had pledged to serve.
Those were reasonable expectations of its customers, but Goldman's actions demonstrate that it often saw its clients not as valuable customers, but as objects for its own profit. This matters, because instead of doing well when its clients did well, Goldman Sachs did well when its clients lost money.
MICHAEL SWENSON, MANAGING DIRECTOR, STRUCTURED PRODUCTS GROUP TRADING, GOLDMAN SACHS: I do not think that we did anything wrong. There's things that we wish we could have done better in hindsight, but at the times that we made the decisions, I didn't think we did anything wrong.
DANIEL SPARKS, FORMER PARTNER, HEAD OF MORTGAGES DEPARTMENT, GOLDMAN SACHS: Regret to me means something that you feel like you did wrong, and -- and I don't have that. But I do have, though, is, you know, we made mistakes in our business, like I think any business does, and we made some poor business decisions in hindsight.
UNIDENTIFIED MALE: So do you think you contributed -- your actions contributed to the financial downturn that we experienced in 2008?
SPARKS: Do I think my personal actions did?
UNIDENTIFIED MALE: Goldman Sachs'.
SPARKS: You know, I -- I don't know. I would like to think about that to respond to you. I haven't thought about that specifically.
(END VIDEO CLIP)
BLITZER: All right, let's get some insight now from someone who appreciates and understands what's going on because she was once an insider. She's certainly been a close observer of the financial markets.
Joining us now, the business journalist and former Wall Street executive Alexis Glick.
Alexis, right out of college, you worked at Goldman Sachs, so you can appreciate what's going on. In answer to that basic question that the senator asked, did these executives do anything wrong, what do you think?
ALEXIS GLICK, FINANCIAL EXPERT: Well, here's the complicated part about this, and it's -- it gets into the nuances.
What they did wrong in this situation, if it is proven, is they sold something that was masterminded by one customer, and took precisely that complex derivative in this case and then went and sold it to another customer. They will argue that it was the credit rating agency that gave it the AAA rating that's culpable for it.
The issue is, do you have to disclose to the purchaser of that vehicle that somebody else who asked you to create something that will give you downside protection in the housing market is precisely what you sold to the buyer?
At issue here, though, Wolf, when you talk about issues here as to whether or not they were betting against their customers, whether they were hedging, do they need to disclose these things, the truth of the matter is, every single day on Wall Street, issues are brought, whether it's taking companies public, whether it's selling municipal bonds, whether it's selling corporate bonds.
It doesn't always mean that what Wall Street sells is something that they, too, like or would invest in. There's an expectation that they have to do their diligence, due diligence, but there's an expectation that the institutional customer has to do it, too. BLITZER: Did what Goldman Sachs did back in 2007 and 2008 contribute to the economic collapse?
GLICK: Yes. That I think you can point to, that it wasn't just the likes of Goldman Sachs, but these -- these huge bets on the economy, on the markets, particularly on housing, certainly contributed. So did it contribute for the rest of the likes of Wall Street.
But the government, the SEC, the likes of Congress, they all participated in it as well. It was the Wild West. It was a fully unregulated place, where no one had their arms around the extent of the damage that was going to be done.
BLITZER: So, Alexis...
(CROSSTALK)
GLICK: So, yes, are they culpable? Absolutely. So were the rating agencies as well.
BLITZER: We are going to get to that in a moment. But what I hear you saying is, these very same senators if they were serving at the time when there was this deregulation going on at the tail end of the Clinton administration in the '90s, they bear responsibility as well?
GLICK: Yes.
I mean, you know, here's -- here's the fascinating thing about this. We're talking today about whether or not banks that received deposits from the U.S. consumer should have the right to go out and use those dollars to bet proprietarily on behalf of a firm. Of course that's irresponsible to take consumers' deposits and go out and make risky bets.
These were risky bets. But let's not forget, at the time, the likes of Goldman Sachs, they were not a bank holding company. Many of these banks only received bank holding company or commercial bank status when the wheels started to come off the engine because of the failure of Lehman and then, of course, the forced merger between Bank of America and Merrill Lynch.
So we have got to go back and take a look at what was happening. And, yes, we should go back and take a look to Glass-Steagall, the repeal of that, add to this in 1999, which was the issue of allowing banks to own broker dealers. I'm not suggesting we go back and change that. It's been done. But we just need to regulate and look at how these businesses function in a much more effective way.
BLITZER: Alexis Glick, thanks very much. Thanks for coming in to THE SITUATION ROOM.
GLICK: Absolutely. Terrific being here.
BLITZER: All right. Good. We certainly will have you back. You may wonder how investors were led to buy mortgage products that in some cases turned out to be junk. The answer is that some of those products were given the highest credit ratings. How is this possible?
Lisa Sylvester's been looking in to this.
Lisa, Alexis just pointed out some of these junk deals, they got very good ratings from these ratings agencies.
LISA SYLVESTER, CNN CORRESPONDENT: Yes, it all goes back to the credit ratings agencies companies.
In fact, here's a real-world example that we will give you. Washington Mutual, or WaMu, a thrift, had a division that specialized in subprime lending. That division was called Long Beach. And they made it very, very easy for people to qualify for home loans.
In fact, it was so easy to qualify, they had a program -- it's called the stated income program -- that many customers would just state their income, and it was never verified. Those loans by themselves, let's say, they would have been given ratings about a BBB, not a very high rating.
What Goldman was then doing was taking a package of those BBB mortgage loans, repackaging them, turning them into securities, and then convincing the rating company, either Moody's or Standard & Poor's, to give it a AAA rating.
Then they would turn around and sell those new mortgage products to investors. And here's a key thing. Many of those investors, they weren't your big fat cats with money to burn. They were in fact, school districts. They were pension funds, small municipalities that relied on that AAA rating, or they would have never invested in these products.
Long Beach and WaMu were, in fact, among the first to collapse when the housing bubble burst 18 months ago. And the investors who bought those mortgage-related products lost a lot of money -- Wolf.
BLITZER: What was the incentive for these rating companies in all of this?
SYLVESTER: You know, the credit rating companies, it really does appear that they had a significant conflict of interest -- conflict of interests, rather.
Wall Street companies, like Goldman, were actually paying and are actually paying the credit rating companies millions in dollars in fees to rate their mortgage products. E-mails obtained by the Senate subcommittee show that to keep those fees coming into the door, rating companies were willing to bend over backwards to give the highest rating to these mortgage investment products that Goldman was creating at the time.
BLITZER: What are the -- S&P and Moody's, the two major ratings companies, what are they saying?
SYLVESTER: Well, we reached out to them.
And Moody's, we called and we e-mailed. We didn't get a response from them. But we did get a statement from S&P saying that the company has -- quote -- we have this here -- "a long tradition analytical excellence and integrity. We have also learned some important lessons from the recent crisis and have made a number of significant enhancements to increase transparency, governance, the quality of our ratings."
BLITZER: Because it's pretty scary. They give you a AAA rating and it turns out to be junk. That's not very encouraging.
SYLVESTER: And that's just it. It's the underlying investment, the underlying mortgages that were essentially propping up these securities.
If you unpeeled and you looked underneath them, what you found was, you found BBB. You found that these mortgages were almost guaranteed to fail, and yet they were still going out and selling these things.
BLITZER: Everyone has to step back, learn from the mistakes, and make sure they don't happen again.
I fear, though, they are not necessarily learning as much as they should. But let's hope they do.
Lisa, thank you.
Jack Cafferty is coming up with "The Cafferty File."
Then, air marshals scrambling into action on a Delta flight bound for the United States because of what one passenger allegedly did and said.
Also, an American citizen working with al Qaeda. We have details of a new video that has just surfaced.
Plus, a new Facebook feature has one U.S. lawmaker warning that your privacy may be compromised, and he's threatening to take direct action.
(COMMERCIAL BREAK)
BLITZER: Let's check in with Jack. He's got "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: Despite today's 213-point drop and the Goldman Sachs hearings ongoing in Washington, the bloom is slowly returning to the rose that is Wall Street. More and more Americans are now willing to put money into the stock market these days.
A new Gallup poll shows 22 percent of those surveyed say stocks or mutual funds are the best long-term investment. That's a dramatic increase from 15 percent who felt that way a year ago. Real estate tops the list in this poll -- 29 percent say that that is the best long-term investment -- 28 percent say savings accounts or C.D.s, and 14 percent say bonds.
The poll also shows that wealthier, college-educated Americans prefer stocks and mutual funds for long-term investing. Those with lower incomes, no college education prefer savings accounts or C.D.s.
There are several reasons why Americans might be a bit more confident in Wall Street these days. For one thing, the stock market has staged quite a comeback. It's in much stronger position now. The Dow Jones industrial average closed yesterday at 11205. That's up from a low of 6547 in March of 2009, at the height of the financial crisis, in other words, an impressive gain indeed, 42 percent in little more than one year.
Also, people may be more confident because they think the government will soon have more oversight when it comes to Wall Street. As we reported in the last hour in "The Cafferty File," two-thirds of Americans support stricter regulations for banks and financial institutions.
So, in case there are a few extra bucks in your pocket, as the economy begins to show signs of recovery, here's the question. If you had an extra $10,000, would you invest it in the stock market? Go to CNN.com/caffertyfile. Post a comment on my blog.
BLITZER: Good question, Jack. I always believe in diversification.
CAFFERTY: Well, and you have a lot of money to spread around.
(LAUGHTER)
BLITZER: I knew you were going to say that.
Jack Cafferty, thanks very much.
A Delta Air Lines flight from Paris to Atlanta has been forced to land in Bangor, Maine, after an apparent threat led to the detention of a passenger. This is a fast-moving story. We're getting new information.
Our homeland security correspondent, Jeanne Meserve, is joining us. Jeanne, update our viewers on what we know.
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Jeanne, I'm hearing -- excuse me.
(LAUGHTER)
MESERVE: Wolf, I'm hearing from law enforcement sources that they have not given the all-clear yet, but at this point in time, they have not found any explosives on this individual or on the aircraft.
They also have found no derogatory information about this individual who allegedly made this threat on the aircraft in any of the terror databases that the U.S. government maintains. This individual is described as a U.S. citizen, late 20s, from the state of Florida.
He made claims on board this flight that he had explosives in his luggage and that he had false documentation. Air marshals on the flight broke cover, and they diverted the flight to Bangor, Maine. There, the 235 passengers and 13 crew members were taken off the flight. They are still being questioned, and so is this individual.
The FBI is leading the investigation, leading the questioning to figure out whether or not this individual indeed posed a security threat. The early indications are, Wolf, that he did not -- back to you.
BLITZER: Thanks very much, Jeanne.
Let's get some more on this and other issues.
Our national security contributor Fran Townsend is joining us, used to be the homeland security adviser to President Bush.
What do you make of this?
FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Well, you know, Wolf, you would think the guy at a minimum flunks the commonsense test. People -- after the last incident with the diplomat on Qatar from the flight to Denver, where the plane gets diverted, searched, people have to be very careful about what they say.
We have heard again and again from the intelligence community, from John Brennan, the president's homeland security adviser, and from intelligence officials that the threat is very real. They worry. Al Qaeda's is obsessed with aviation. They worry about another attack, a successful attack, instead of the one like the Christmas Day bomber.
And so people just can't be too careful about what they are saying.
BLITZER: So, even if this guy was joking or whatever, he's an idiot for doing so, because there's zero tolerance on a transatlantic flight into the United States.
(CROSSTALK)
TOWNSEND: That's right. And it's not he shouldn't have known that from the last guy who diverted the flight to Denver.
BLITZER: And all of us remember the Christmas Eve plot involving that -- Abdulmutallab, the shoe bomber.
TOWNSEND: That's right.
(CROSSTALK)
BLITZER: The underwear bomber, we should say. TOWNSEND: The underwear bomber, right, exactly.
BLITZER: Shoes, underwear, whatever. It's...
(LAUGHTER)
TOWNSEND: Yes.
BLITZER: People are very sensitive. And you get those air marshals on a flight like this, they are not going to take any chances. That's why they didn't wait to go to Boston or Atlanta. They landed in Bangor, Maine -- that's the closest airport over the Northern Atlantic into the United States -- and took action.
TOWNSEND: That's right. And then what is involved with really putting the threat -- the potential threat to rest is you have got to search the whole plane. You have got to interview the passengers. You've got to search the interior to the plane. And so, you know, this takes lots of time and causes people lots of inconvenience and cash.
BLITZER: All right, let's dissect two videos that have just come in, this first video involving this American-born Muslim cleric, al- Awlaki, in Yemen. It's now apparently an official al Qaeda video. You have had a chance to review this video. What do you think?
TOWNSEND: Well, it's pretty amazing, Wolf.
You realize that to have an American speaking in very colloquial English, the people who identify with him, he understands the American psyche. He understands the fear factor that terrorism and the threat of terrorism inflicts on the American public. And so...
BLITZER: This is a recruiting tool, in effect.
TOWNSEND: That's exactly right. It's a recruiting tool for other Western operatives who will be able to cross borders, who will be able to fit in, in communities in the United States. And so, he's a very powerful tool for al Qaeda.
BLITZER: Now, the other video ABC News got ahold of, it shows Abdulmutallab, the underwear bomber, as he's called, supposedly training with al Qaeda in Yemen, various targets there. You have looked at this video as well.
TOWNSEND: Yes. It looks pretty clear that this is Abdulmutallab, although law enforcement officials are being very careful.
Look, this is a treasure trove, because what it will allow law enforcement and intelligence officials to do is look for clues based on the video. Where is this training camp? What kind of facilities are there? Who else is with him? Can they identify other potential bombers who they have not yet captured and target them?
BLITZER: Is this guy -- he's been in U.S. custody since Detroit, when he was arrested -- is he cooperating with U.S. authorities, based on what you're hearing?
TOWNSEND: You know, it's interesting, Wolf. Originally, we heard that he was talking right after he was taken into custody and then stopped. And then we have heard again, at least intermittently, that he has cooperated with -- on the advice of his lawyer.
Makes good sense. The government's got a very strong case and cooperation will help him in terms of a potential plea arrangement.
BLITZER: If he cops a plea, if you will.
And he could go through with these U.S. intelligence, law enforcement, homeland security experts the video and identify others there and they can get a better sense of who might be involved with al Qaeda in Yemen.
TOWNSEND: Not only that, Wolf. That's exactly right, but not only that. He can also tell them about other, what were other contingency plans? How else might they deploy this type of a weapon? What other weapons was he trained on that perhaps he didn't use on Christmas Day?
And so if he's willing to cooperate and be truthful, he can be a treasure trove of information for U.S. officials.
BLITZER: Fran Townsend, thanks very much.
That oil slick off the coast of Louisiana is now so big it can be seen from space. Will it bring disaster to the Gulf Coast states?
Plus, an iPhone prompts a police raid. We are going to show you why this prototype is causing so much controversy right now.
(COMMERCIAL BREAK)
(NEWS BREAK)
BLITZER: Facebook under fire on Capitol Hill right now -- why some lawmakers say the social networking site is putting your privacy at risk.
And President Obama holds a town hall meeting in Iowa. Is he already thinking ahead to 2012? John King is standing by. We will discuss.
(COMMERCIAL BREAK)
BLITZER: The oil spill from a leaking well under a sunken rig doubled in size today, covering more than 3,000 square miles in the Gulf of Mexico, that according to the U.S. Coast Guard.
Nearly 50 vessels are working as hard as they can to help contain and clean up the slick and the estimated 42,000 gallons of oil that are flowing into the Gulf each day.
NASA satellite images taken Sunday show the silvery slick, which is now located about 21 miles from the Louisiana coast. The Coast Guard says it appears the slick will remain at sea for at least the next three days.
Health and fishing industry experts say seafood will remain safe to eat. That's the latest on that disaster out in the Gulf of Mexico.
Facebook is coming under scrutiny on Capitol Hill, where some U.S. lawmakers say your privacy is now in jeopardy.
Brian Todd is working this story for us.
Brian, explain what's going on.
BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, Facebook is the most popular social networking site in the world, 400 million users a month. It now has a pilot program that could prove to be very lucrative.
It's partnering with three popular Web sites to make it easier for those Web sites to personalize their content for millions of Facebook users. But a powerful U.S. senator says this arrangement compromises users' privacy. I went through the process with an expert who monitors Facebook trends.
(BEGIN VIDEOTAPE)
TODD (voice-over): We log on to a typical Facebook account. The usual features pop up, pictures, friends listings. Then we go on to a popular restaurant and shopping guide Web site, Yelp. And it says, "Yelp is using Facebook to personalize your experience."
What does that mean? I ask Nick O'Neill of AllFacebook.com, a group that monitors Facebook trends.
NICK O'NEILL, ALLFACEBOOK.COM: Rather than we telling Yelp what my Facebook account is, they're going to know by default when I show up what my Facebook account I.D. is.
TODD (on camera): And when they -- when you say what your Facebook account I.D. is, does that mean your name, your friends' list, some other things like that?
O'NEILL: Yes, with that account I.D., they can then access my name and my friends' list and any other public information that Facebook has shared about me.
TODD (voice-over): Things like Web sites you visited, product brands you like, that's all part of a new agreement Facebook is testing out with Yelp, and the music listening Web site Pandora and Microsoft's Docs.com.
Contacted by CNN, a Facebook representative said that information is already publicly available and their users can opt-out of the sharing arrangement if they want.
SEN. CHARLES SCHUMER (D), NEW YORK: This is not fair. TODD: Still, Senator Charles Schumer wants to stop Facebook from just giving the information to third-party Web sites by default.
(on camera): Facebook claims that the changes that they've made don't take away any controls that people have over their information, that in many cases, they even give them greater controls.
SCHUMER: That is not true. And the fact that you have to opt- out and the fact that the opt-out procedure is complicated clearly means that people have less control. If they wanted people to keep the same level of control or even enhance it, they would go for opt- in.
TODD (voice-over): The Facebook rep says those three Web sites are required to respect users' privacy. The rep says the opt-out mechanism is easy. All a user needs to do, he says, is click an "X" in a drop-down blue bar.
Going through it with O'Neill, we found it usually takes several more steps, navigating through Facebook's Web site to opt-out.
NEILL: So, six clicks later we're here. And we have to uncheck this box.
(END VIDEOTAPE)
TODD: Now, Senator Schumer says that if Facebook does not change this arrangement, he says he has asked the Federal Trade Commission to come up with new rules on how private information is shared between social networking sites. An FTC spokeswoman told us the agency is looking in to all that and will develop a framework.
We also want to let you know, CNN's Web site has just entered into an agreement with Facebook so that CNN.com users can recommend and share stories with Facebook friends. However, their profile information is not shared, Wolf.
WOLF BLITZER, CNN ANCHOR: And remember that Facebook did have some earlier problems with supposed privacy concerns among its users.
TODD: That's right. In 2007, it introduced the tool called Beacon that automatically broadcasts users' activities on other Web sites on Facebook. Now, the Facebook users protested. Facebook agreed to let users opt-out for a period. Then it removed that feature entirely.
A Facebook rep says in the wake of that, an independent privacy foundation is being set up. You know, to its credit, Facebook has always pretty heavily guarded the privacy of its users. That's why this new arrangement is noteworthy.
BLITZER: All right, we'll see what happens with it. You'll stay on top of it for us.
TODD: Absolutely.
BLITZER: Brian Todd, thank you.
A return to the heartland for President Obama. What does his trip today to Iowa really mean? We'll talk about that, and more, with CNN's John King. He's standing by.
And 45 years after the murder of Malcolm X, his confessed assassin walks free.
(COMMERCIAL BREAK)
BLITZER: President Obama is in Iowa right now. That's the state that helped launched his candidacy back in 2008. In a town hall meeting, he talked about Arizona's tough new law cracking down on illegal immigrants, and the need for the federal government to take action on immigration reform.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now, suddenly, if you don't have your papers and you took your kid out to get ice cream, you're going to be harassed. That's something that could potentially happen, that's not the right way to go. And we can -- and we can -- we can --
(APPLAUSE)
OBAMA: You know, we can -- we can try to crack down, but the truth is, that 11 million to 12 million folks, we're going to have to make them take responsibility for what they did, and the way to do that is to actually make them register, make them pay a fine, make them learn English, make them --
(APPLAUSE)
OBAMA: -- make them take responsibility for the fact that they broke the law. You make them get in the back of the line, but you also say, OK, if you do it the right way, then you have a chance to become an American citizen. And if we have that kind of -- if we have that kind of comprehensive approach, then we can once again be a nation of laws and a nation of immigrants.
(END VIDEO CLIP)
BLITZER: All right. Let's talk about this with CNN's John King. He's the host of CNN's "JOHN KING, USA," which comes up right after THE SITUATION ROOM.
Is anything going to happen on a comprehensive immigration reform this year?
JOHN KING, HOST, "JOHN KING, USA": Let me give you a little bit of news I just picked up. The answer to that is they're going to try, Wolf, most Democrats and most Republicans believe they don't have the votes.
But here's a little piece of information I just learned. Remember, yesterday, Lindsey Graham, Republican from South Carolina, backed out of his effort to negotiate a climate and energy bill with Joe Lieberman, the independent, and John Kerry, the Democrat, from Massachusetts. Well, I'm told that John Kerry went to majority leader, Harry Reid, and said, "Can you please put off immigration until after the election, because that's the only way to get Lindsey graham to continue his negotiations with us on the energy and climate bill."
They wanted to do it first and the immigration after the election and I'm told the majority leader said, no, thank you. I'm going to bring immigration reform to the floor in the next several weeks. They're still working on a piece of legislation.
I will tell you, though, Wolf, that even those close to Harry Reid say he does not have the votes right now, they do not have 60 votes to bring this forward, and many think it is politically motivated because of his troubles back home in Nevada.
But the White House, you just heard the president there, the White House is on his side. They say they should at least make an effort this year even if they can't pass this.
BLITZER: Because the charge against Harry Reid, the majority leader, is that he's trying to get some support from Hispanics in Nevada which he desperately needs.
KING: And he desperately needs them in Nevada and many other Democrats need them across the country. And Latino support, when you ask them who they're going to vote for Congress this year, is down more than 10 points than it was in 2008 and 2006. So, that would not only affect Harry Reid in Nevada. It will affect congressional candidates in Arizona, in Nevada, in Illinois, in many other places -- Florida among them.
Latino vote is increasingly important. Michael Bennet, that tough Colorado Senate race, Latino vote will be important there. So, it is one of the problems for the Democratic Party is a drop in support among Latinos.
I'll tell you another problem -- the president in Iowa today, his approval rating back in 2009 in rural America was 68 percent when he took office. It is 57 percent now in rural America. Again, many of those competitive -- it's not just about him in 2012 -- many of those competitive statewide races and congressional races go through small town America. The president knows he and the party have a bit of a problem right there. That's why he's out there.
BLITZER: You're going to have a lot more on this coming up at the top of the hour.
KING: You bet.
BLITZER: "JOHN KING, USA" is coming up at 7:00 p.m. Eastern.
All right. The general attorney, Eric Holder, says the federal government may challenge Arizona's tough new immigration law. Stand by, we're getting more information on that.
And cursing on Capitol Hill. Protests and profanities at the Goldman Sachs hearing today. Jeanne Moos is all over that story. It is most unusual.
(COMMERCIAL BREAK)
BLITZER: Lisa Sylvester's monitoring some of the other top stories in THE SITUATION ROOM right now.
What else is going on, Lisa?
LISA SYLVESTER, CNN CORRESPONDENT: Hi, Wolf.
Well, the only man who admitted shooting Malcolm X has been paroled 45 years after the civil rights leader was assassinated. Sixty-nine-year-old Thomas Hagan has been on a work-release program since 1992, which required him to spend only two days a week in prison. Two other men convicted in the killing were paroled in the 1980s, and have all said they're innocent.
Two controversial abortion bills are the law in Oklahoma. The Republican-led Senate followed the House on voting to override vetoes by Democratic Governor Brad Henry. One law requires women to have an ultrasound and listen to a description of the fetus before getting an abortion. A similar law was struck down by the state Supreme Court. Henry says this law will also be challenged.
And Attorney General Eric Holder says the federal government may challenge Arizona's controversial new law, cracking down on illegal immigrants. He talked about it at a news conference today --
(BEGIN VIDEO CLIP)
ERIC HOLDER, ATTORNEY GENERAL: I think that that law is an unfortunate one. I think that it is, I fear, subject to potential abuse, and I'm very concerned about the wedge that it could draw between communities that law enforcement is supposed to serve and those of us in law enforcement. The Justice Department, along with the department of -- along with DHS, is looking at the law to decide exactly how we are going to react to it. We are considering all possibilities, including the possibility of a court challenge.
REPORTER: Do you think it's clearly an unconstitutional measure?
HOLDER: Well, I say, we are reviewing the law right now. We have an -- a group that has been together over the past few days to examine exactly what our reaction is going to be to it. So, that review's under way.
(END VIDEO CLIP)
SYLVESTER: The Arizona law requires police to ask people for documentation if they're suspected to be in the country illegally. Critic, though, say it will lead to racial profiling -- Wolf.
BLITZER: All right. Lisa, thank you.
Another story we're following, the speaker of Ukraine's parliament huddling under umbrellas as eggs flew toward him. What could possibly cause this kind of behavior?
CNN's senior international correspondent, Matthew Chance, explains.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: Political leaders behaving in this way, this is the floor of the Ukrainian parliament. But the scene looks like something from a bar room brawl. Fists were flying. Hair was being pulled.
The speaker at one point pelted with eggs, not by protesters, but by the politicians themselves. He had to be shielded from the barrage with umbrellas.
It is a little comical, but it also underlines what are very serious, very deep divisions in Ukrainian politics.
All this chaos coming, remember, amid a debate to ratify the extension of a lease on a Russian naval base in Ukraine. Nationalists want to take the country closer to the west and are outraged that this should be done. But the current pro-Russian government in power in Ukraine has been forcing the measure through, extending the lease by 25 years and removing one of the key sticking points, by the way, in ties between Russia and Ukraine, these two former Soviet countries.
Matthew Chance, CNN, Moscow.
(END VIDEOTAPE)
BLITZER: Jack Cafferty is coming up with your e-mail.
Also, a day of drama in the U.S. Senate. They're grappling with financial reform and hammering Goldman Sachs executives. John King will talk with two key players, Republican Kay Bailey Hutchison and Democrat Maria Cantwell. That's coming up on "JOHN KING, USA" at the top of the hour.
Plus, Jeanne Moos with a most unusual look at today's Goldman Sachs hearings.
(COMMERCIAL BREAK)
BLITZER: Let's check in with Jack Cafferty for "The Cafferty File" -- Jack.
JACK CAFFERTY, "THE CAFFERTY FILE": Clarification, Wolf, we misstated the gain for the market over the last 13 months. We should have said the Dow's up 71 percent, not 42 percent. So, it was better than we reported and I regret the error. It's my producer's fault.
The question this hour is: if you had an extra $10,000, would you invest it in the stock market?
John in Texas writes: "Absolutely not. Buy something tangible, like land. At least you can grow something to eat."
Chris in Atlanta says: "I have no qualms about putting stock money into the stock market. I just raised my 401(k) contribution by 50 percent. If you've been sitting out of the market the last year, you missed a tremendous investment opportunity."
Jeremy in Michigan: "After seeing today's Goldman Sachs' nonsense, probably not. Wall Street's apparently only for elites."
Ralph writes: "The market can stay irrational longer than I can stay solvent."
Pat in Michigan: "Yes, but only in a company that is American with products made in America by American workers."
Harvey in Florida: "No way. Too much psychology involved. Stock market performance is about projected future earnings. It's no longer about tangible assets like plant/property/equipment or finished goods. I'd rather buy or upgrade my home and then keep the rest of my money in an FDIC bank."
Frankie writes: "No. Could anyone guarantee me that my money was not going to the side they were setting up and then betting against?"
And Karl in San Francisco writes: "I don't have that $10,000 but I can probably scrape up $1,000 or $2,000 to invest and I just might do that. A few shares here and a few shares there and maybe I can do well as the economy comes back. It is coming back and I better move soon or forget about it." Thanks for the idea.
If you want to read more on this, you can go to my blog CNN.com/CaffertyFile.
See what other people think about investing in the market. And again, the error was my producer's fault.
BLITZER: Jack, hold on a second because I want you to watch this little exchange the president had in Iowa wrapping up his town hall meeting there. Watch this.
(BEGIN VIDEO CLIP)
TARA HOWARD (ph), FIFTH GRADER: My name is Tara Howard and I'm a fifth grader. I go to Cardinal Elementary.
OBAMA: Well, it's good to see you.
HOWARD: My friend wanted me to ask you what kind of pie you had, and my grandma b-mom says hi to Tom Vilsack.
OBAMA: OK, there you go.
(APPLAUSE) OBAMA: I had rhubarb pie. And it was some tasty pie.
By the way, some of you heard that my cholesterol, it's because of pie.
(LAUGHTER)
OBAMA: The White House, along with that Air Force One, they have really good pie at the White House. So, that's one of the other perks that you have to -- that you get with being president.
(END VIDEO CLIP)
BLITZER: Delicious pie over at the White House indeed.
All right. Tom Vilsack, by the way, is the secretary of agriculture, the former governor of Iowa. And he's in Iowa today with the president.
So, what did we learn from today's heated Senate grilling of some Goldman Sachs executives? John King will go in depth. That's coming up at the top of the hour on "JOHN KING, USA."
And CNN's Jeanne Moos has her own take on the hearing, bleeps and all.
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SEN. CARL LEVIN (D), MICHIGAN: Let me tell you, the context is mighty clear. June 22 is the date of this e-mail. Boy, that Timberwolf was one (EXPLETIVE DELETED) deal. How much of that (EXPLETIVE DELETED) deal did you sell to your clients after June 22, 2007?
(END VIDEO CLIP)
(COMMERCIAL BREAK)
BLITZER: We're here in Washington, D.C. Take a look at these "Hot Shots" coming in from our friends over at the "Associated Press" -- pictures likely to be in your newspapers tomorrow.
In France, angry farmers drive their tractors through the streets of Paris to protest decreasing incomes and demanding government intervention.
In southeast China, look at this -- a solar halo radiates behind a man causing the sky to appear purple.
In Germany, a couple shares a moment by a pond. Very nice.
And in Serbia, check it out. A playful dog splashes around in a fountain.
"Hot Shots," pictures worth a thousand words. Protests, profanities and a lot more all making for a day of some high drama as U.S. senators unleash the indignation on Goldman Sachs executives. CNN's Jeanne Moos takes a most unusual look.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN CORRESPONDENT (voice-over): Wonder which was worse -- being chased down the hall -- by protesters and press or getting pressed by senators --
LEVIN: Your own person said they're too smart to buy this kind of junk.
UNIDENTIFIED MALE: Don't do the hindsight thing with me. I mean, come on.
MOOS: There was head-shaking, head-wiping and head-scratching. But the thing this hearing may be most remembered for was a six-letter word not usually heard at congressional hearings.
LEVIN: Boy, that Timberwolf was one (EXPLETIVE DELETED) deal. How much of that (EXPLETIVE DELETED) deal did you sell to your clients? You didn't tell them you thought it was a (EXPLETIVE DELETED) deal.
MOOS: Committee chairman, Senator Carl Levin, got the term from an internal Goldman Sachs e-mail, not internal any more.
LEVIN: How about the fact that you sold hundreds of millions of that deal after your people knew it was a (EXPLETIVE DELETED) deal. Does that bother you at all?
MOOS: Didn't bother the media. Some Web sites kept count.
LEVIN: Should Goldman Sachs be trying to sell a (EXPLETIVE DELETED) deal?
UNIDENTIFIED MALE: I didn't say that.
LEVIN: No. Who did? Your people, internally. You knew it was a (EXPLETIVE DELETED) deal.
MOOS: Former Goldman Sachs honcho Daniel Sparks took a couple of swigs after that exchange, only to have another senator bring it up again an hour later.
SEN. CLAIRE MCCASKILL (D), MISSOURI: By the way, this is the same one that your folks call (EXPLETIVE DELETED).
MOOS: And six hours later, it came up again, this time directed at Goldman's CEO.
LEVIN: Are junk or a piece of crap or a (EXPLETIVE DELETED) deal.
MOOS: If you were this Goldman Sachs exec, you'd sigh, too. All eyes were on him partly because of his nickname --
FABRICE TOURRE, GOLDMAN SACHS EXECUTIVE: My name it Fabrice Tourre.
MOOS: The Frenchman is better known as Fabulous Fab.
Protesters dressed like convicts were relentless --
UNIDENTIFIED MALE: You can't even accept responsibility, a small amount of responsibility!
TOURRE: I firmly believe that my conduct was correct.
UNIDENTIFIED MALE: I do not think that we did anything wrong.
UNIDENTIFIED MALE: I don't have regrets about doing things that I think were improper.
LEVIN: You got no regrets? You ought to have plenty of regrets.
MOOS: The protesters dressed as inmates --
UNIDENTIFIED FEMALE: All your money won't keep you out of jail.
MOOS: -- ended up being corralled by police as photogs bounced off walls -- and into each other, talk about the need for regulation.
UNIDENTIFIED MALE: No running in the hall!
MOOS: Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
BLITZER: Thank you, Jeanne Moos.
Remember, you can always follow what's going on here in THE SITUATION ROOM. I'm on Twitter. You can get my tweets. Go to Twitter.com@WolfblitzerCNN -- @WolfBlitzerCNN -- that is all one word.
Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.
"JOHN KING, USA" starts right now.
