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CNN Sunday Morning
Bailout Breakthrough
Aired September 28, 2008 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN NEWS ANCHOR: Here on CNN SUNDAY MORNING, what is being called a breakthrough in the government's quest to bail out the nation's ailing financial system.
TJ HOLMES, CNN NEWS ANCHOR: Also a lot of undecideds out there. Don't know just which one of these two guys they want to be the next president. Well, the undecided voter, we have assembled some here this CNN SUNDAY MORNING, they will be here with the studio with us and we will have a conversation with them about if that debate made any difference.
NGUYEN: Well, this is making a difference. Kyle is now a Hurricane inching closer to the coast of Maine and Canada. On the CNN Center in Atlanta, we are bringing you news from all around the world this morning. Hello, everybody, I'm Betty Nguyen.
HOLMES: And good morning to you all, I'm T.J. Holmes and it is Sunday, September 28, thank you so much for being right here with us.
NGUYEN: Let's get right to that bailout. Not yet a done deal, but close. House Speaker Nancy Pelosi came out of a long negotiating session overnight and said that there had been, quoting here, "great progress" on the plan. The House Republicans hadn't completely signed off on the plan, the framework now being hammered out and that includes some of the President Bush's original proposals. Our correspondents all over this developing story for you today -- Ed Henry is at the White House, business correspondent Susan Lisovicz in New York, and Kate Bolduan is on Capitol Hill.
So, let's start with you Kate, on Capitol Hill. How close were they, because I know the worked late into the night, once again?
KATE BOLDUAN, CNN NEWS CORRESPONDENT: Once again, it seems to be becoming a routine here on Capitol Hill, a very rare and unusual routine. They seem to be closer than they have in the past because so many of the key negotiators were at the negotiating table late into the evening.
Now, overnight, staffs of these various principal players, they were together drafting this language trying to put this framework that they've agreed to into legislative language on these lawmakers can take it back to their caucuses and try to get that broad partisan support that they're searching for, all of this after very long hours in the House speaker, Nancy Pelosi's, office. Last night. Just after midnight, they emerged to say they're not all the way there, they don't have a deal, but they're a long way to it. Listen here. (BEGIN VIDEO CLIP)
NANCY PELOSI, HOUSE SPEAKER: We've made great progress. We have to commit it to paper so that we can formally agree, but I want to congratulate all of the negotiators for the great work that they have done.
REP ROY BLUNT (R), MINORITY WHIP: We'll be looking at the final wording of this tomorrow, talking to my colleagues, and really, I'm grateful we're where we are. I think we will be able to have an announcement tomorrow, but these are difficult issues and everybody showed lots of patience.
(END VIDEO CLIP)
BOLDUAN: Well, staffs have been working overnight. They hope once that legislative language is drafted, they do plan, at least at this point, to post the draft on the Internet for all to see. And some of those key elements, these details that we see coming out when it comes to the financing, it's going to come out in installments. The Treasury will be able to buy up those mortgage assets, but it is going to start at $250 billion made available immediately, another key element that has come out that we hear, because this was a sticking point for House Republicans, is the implementation of a government backed insurance plan that would -- that the financial industry would be paying the premiums. House Republicans say that would be key to minimizing the risk to the taxpayers so they're not on the hook for so much of this price tag. We'll be hearing a lot more about this morning -- Betty.
NGUYEN: Tax payers also want to though about those golden parachutes for CEOs after businesses have failed, so we'll see where that is in the plan. Kate Bolduan joining us live, thank you, Kate.
HOLMES: Well, let's head to the White House, now. Ed Henry, there. This plan, does the White House like it and, also, how involved is the president, here? Does he have much, I guess, muscle he can actually push around these guys, some of his Republicans, there, to get them on board with this plan?
ED HENRY, CNN NEWS CORRESPONDENT: That's the big question moving forward, T.J., whether or not the president really has the juice, the clout, to bring this to conclusion. He's at least gotten through it looks like the first major stage here and I can tell you White House officials are saying they're cautiously optimistic about this first step that Kate's been reporting on, this sort of framework for an agreement on Capitol Hill. And they're cautiously optimistic that it can eventually become law, but there are several hurdles that have to be cleared.
I can tell you from here, officials are saying that the stakes could not be any higher. In fact, one of the experts that lawmakers were consulting with in the wee hours last night about what these various visions would do to the U.S. economy was the legendary investor, Warren Buffett. And I spoke to some people who were in contact with him last night who were saying that Buffett was saying in very stark terms that if Congress did not act quickly, that the U.S. could face the biggest financial meltdown in its history. Gives you an idea of the kind of advice and counsel Congress was getting in the wee hours. And when they emerged from those late night talk, Treasury secretary, Henry Paulson, who has been the president's pointman, suggested they're on board.
(BEGIN VIDEO CLIP)
HENRY PAULSON, TREASURY SECY: We've been working very hard on this and we've made great progress toward a deal which will work and will be effective in the marketplace and, you know, effective for all Americans.
(END VIDEO CLIP)
HENRY: So, what you basically have is the White House largely in concert with Democratic leaders on the Hill and Republican leaders, but you still have to watch very closely those rank and file conservative House Republicans who are still concerned about those provisions that Kate was reporting on. Are taxpayers really protected or are they going to be on the hook for all $700 billion? Conservative House Republicans will be going through this very closely and that's where the president's juice will come into play here. Can he lobby those House Republicans who normally are onboard with this president and convince them that this is the right strategy?
A lot of those House Republicans who are all up for re-election in just a couple months are hearing from their constituents and many of their constituents are outraged and think this is just a bailout for Wall Street. So, there's a lot of lobbying that still needs to be done. There's going to be some nail biting votes in the House and Senate once there is a formal deal in place -- T.J.
HOLMES: Politics can make some strange bedfellows sometimes. We got the president and Democrats in agreement and Republicans waiting to see what they can get on board. Ed, we appreciate you this morning. We'll stand by for news. We'll talk to you again if anything breaks out.
Well, $700 billion, where in the world does that come from? Can we just write a check, the U.S.? Who pays for it, who picks up that tab? We'll have answers to those questions coming up at the half hour.
NGUYEN: We have some answers right now because Susan Lisovicz knows Wall Street like the back of her hand. She joins us now live. What's the word on the street?
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: I'm studying it right now.
NGUYEN: Yeah, really. Tell us, because we want to know what folks are expecting maybe tonight, tomorrow. Are markets really anticipating a deal?
LISOVICZ: Well, investors have been anticipating a deal for more than a week now, if you were to listen to what Congressional leaders have been day saying, and frankly the market has behaved pretty well considering, but we're seeing lots of signs of distress in the marketplace and of course this played out dramatically with Lehman Brothers' failure, as well as the biggest collapse of a bank in U.S. history, Washington Mutual and more of that will happen.
You know, when the market sells off these days, where is it rooted, Betty? It's rooted in financial stocks. These are companies that are already in a perilous state from their exposure to mortgages, worst housing crisis since the Great Depression, as well as these toxic securities that are tied to mortgages. So, when you see a bank, a run on a banking stock, it just puts them in a far more perilous state and that doesn't build confidence and confidence is something that is completely gone right now.
NGUYEN: Well, let's talk about that because this is leading to a domino effect. You know, when you see big business going down, we see this financial bailout, a lot of taxpayers say, hold up, wait a second, we're on the hook for this bill, but I don't see long lines anywhere. I don't see unemployment hitting historically high, you know, increases, so why are we having to bail out the big guys, here?
LISOVICZ: Well, one would hope that we've learned something from history and that is why I think that Ben Bernanke, the chairman of the Federal Reserve, who is a scholar on the Great Depression, is so alarmed by what he's seeing. You are seeing it. We are seeing it on a daily basis. Just this past week, the largest Chevrolet dealer folded up its remaining dealerships. Why is that?
Look, auto sales are already having problems, but the fact that it's customers are having problems getting loans or, in fact, it is having problems getting capital is an example of the credit crunch. We've seen examples of lots of auto companies, for instance, limiting their access to leases. We're seeing individual customers where their credit ceiling is lowered, big companies and small companies. You want to expand your business, you want to upgrade your business? Maybe not, you can't get the loan. It could come down to something as simple as making payroll. And this is really important for the housing market in particular. We have seen signs, Betty, recent signs, that customers are trying to -- that consumers are starting to weigh in. You know what, these housing prices have come down so much, maybe I can go in this. Not if you can't get a loan. And we have heard from realtors that their customers can't get loans. I'm not only talking about...
NGUYEN: These are people are good credit, right?
LISOVICZ: Yeah, or decent credit. They can't get loans.
NGUYEN: And there are people are trying to get loans off of say a CD or money they already have in the bank, they can't do that. So, that is a sign that rear in a real economic crunch which is why this is all so very important.
LISOVICZ: See, so we're trying to get the capital flowing. That's the idea. NGUYEN: The money moving.
LISOVICZ: How you good that is another story. How it will work, another story. But the problem is real and it's praying out and that's why the stock market is so nervous.
NGUYEN: And that's investors are watching very closely, especially those in Asia because their markets open not too far from now.
LISOVICZ: Eleven hours from now.
NGUYEN: Yep, and that's why time is of an essence. Thank you, Susan, we do appreciate it.
LISOVICZ: My pleasure.
NGUYEN: You know, ahead on CNN SUNDAY MORNING, a "Washington Post" business writer is here to tell you how to get ready for those tough financial times, if you aren't already in them. Well, are you prepared, though? Are you doing the right things? Find out, 9:20 Eastern.
HOLMES: All right, Sarah Palin got a lot of criticism thrown her way since she's been out there, but one of the big things she's been criticized for is she's just not saying a lot. We haven't heard from her a lot. We've heard from her a little, though. Very little in the past few days.
NGUYEN: Yes, we have, because, you know, a little change is coming. We heard from her, we caught up with her last night in fact, and we have Palin's thoughts on her upcoming debate with Joe Biden right here on CNN SUNDAY MORNING.
REYNOLDS WOLF, CNN METEOROLOGIST: And people are hearing from Hurricane Kyle, especially in part of the northeast where they're getting scattered showers from New York back up to Boston. Take a look at the live shot that we have for you from Boston, not far from Fenway Park where the Yankees and Red Sox are going to try to play a doubleheader today with all that rain. Good luck. We'll have your complete forecast coming up not only from Fenway Park, but across the nation. It's in mere moments, right here on CNN SUNDAY MORNING.
(COMMERCIAL BREAK)
HOLMES: That is the sound of money. I prefer the feel of money, myself, but still that is the sound of money. We got a dream that has come true to tell you about. It's a payoff for someone who's being called a genius.
(COMMERCIAL BREAK)
HOLMES: All right, a lot of questions this morning about, we wall it the medial evacuation helicopter that crashed last night in Richie (ph), Maryland. The helicopter was carrying two critically injured patients to a hospital. Four people dead in this crash. There was one survivor and this was one of those patients, it was a teenaged girl. Just before the crash, the pilot radioed that he needed to land to avoid bad weather.
NGUYEN: Hurricane Kyle, a Category 1 storm gaining strength in the Atlantic. Now for this first time in 17 years, parts of Maine under a hurricane watch. Kyle is forecasted to hit the border between Maine and Canada sometime tonight, early tomorrow, but at least check, just a few hours ago, Kyle was about 165 miles off the coast of Massachusetts. Its maximum winds measuring almost 80 miles-per-hour. Kyle comes just two week after Hurricane Ike devastated parts of Texas.
HOLMES: Kyle, we're for the used to seeing hurricanes in that direction.
NGUYEN: No.
HOLMES: They happen, Reynolds. Let's bring you in. But they don't happen that often. Didn't you say Bob was the last one?
WOLF: Bob in 1991, which is 17 years ago, which was when I was 21. Good gosh, all mighty.
NGUYEN: Boy, how time flies.
WOLF: I'll tell you what.
HOLMES: You look good, though.
WOLF: Thank you, T.J. Checks in the mail, big guy.
(WEATHER REPORT)
Guys, let's send it back to you. Seventeen 17 years ago. What were you doing 17 years ago?
NGUYEN: Don't ask. Yeah, you wanted to go there.
WOLF: Tried.
NGUYEN: We're not going to bite on this one. All right? OK, thanks, Reynolds.
You know, it is a dubious sign of the times. Lines for gasoline, they have stretched around the corner, around the block. people waiting for hours to get served.
HOLMES: Yeah, also, we got foreclosures reaching record levels. A lot of people concerned about all that's going on in the economy right now and anybody looking for advice from anywhere, well, we've got some for you, some tips on bracing for this tough, tough economy. Stay right here.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: I think it's very good that this is happening because we are being made aware of the fact that we have some long term problems.
UNIDENTIFIED FEMALE: There are people waiting at 9:30 p.m. for the truck to come at 1:00 a.m. fighting for gas.
UNIDENTIFIED MALE: I just came there Virginia, gas was $3.65 a gallon. You know, plentiful. I don't understand why it's so scarce here in a major city in the United States, I don't understand that. It doesn't make any sense.
UNIDENTIFIED MALE: Where are the other states getting the gas from? And there's gas in Houston. I have relative there is and they don't have this problem, so why us? But, I would definitely search for other sources.
(END VIDEO CLIP)
NGUYEN: It is frustrating, I will tell you that. Two-thirds of the refineries knocked out by Hurricane Ike are back on line, that's the good news, yet, the gas short annual in the southeast, still going strong. Fifteen days after Ike made landfall. You know, in other areas of the country, gas prices extremely volatile, as well. Factor that in with the framework of a massive bailout, an ailing economy, and word that the CEOs of these failed companies will likely walk away with millions. So, we have plenty to talk about this morning. That's why we're going bring in Michelle Singletary. She is a syndicated columnist and personal finance expert and she joins us live.
All right, we got a lot on the plate today. First and foremost, Congress working feverishly to hammer out this bailout package. We're hoping to hear maybe a deal will be done by this evening. But for the taxpayers, for the people on the line for this, for the people worried about their mortgages and their savings accounts, what should they do to get their finances in order?
MICHELLE SINGLETARY, PERSONAL FINANCE EXPERT: Well you know, we've got to go back to the basics. And really that's the problem with what's happened with the economy at large. People got away from saving, they got away from living below their means, they started to be addicted to credit. And so really we've got to pull back and look at your whole financial house. In one of my columns in the "Post," I talked about diversification, but not just in your investment portfolio. Do you have that emergency fund? Do you have enough insurance to cover you say you have a disability? Do you have -- have you brought down all your credit card debt? You know, people are complaining that there's, you know, a loss of credit. That's a good thing. I am not upset about the fact people can't borrow more. That's what got us into this mess in the first place.
NGUYEN: But at the same time, there are a people who have a lot of savings on the line here, they're seeing their accounts be drained as this market starts to drop. What can they do? Because, some would I would say don't do anything, this is a great time to sit where you are, or maybe take advantage of this low market and make some deals. SINGLETARY: Well, your savings in general is not in jeopardy if you have less than $100,000 and in some cases more at your bank. You've got insurance. Now, we have -- if you've got a money market, that's now insured, so your savings, your cash, is okay. In terms offer investments, if you have been diversified across asset lines and everything, you should be fine. And it is...
NGUYEN: So, your saying wait it out? Don't doing do anything drastic. Don't say I'm going to switch all my mutual funds to this and that account. Just stay where you are.
SINGLETARY: That's exactly right, for the most part. I mean, if you're older and closer to retirement, there's some different things you need to do, but for the most part, if you've got everything spread the way you should, don't panic because you're going it make things worse.
NGUYEN: Well, let's talk about this. We saw WaMu, Washington Mutual, this last week, the largest bank failure in U.S. history. JPMorgan Chase who are began chase stepped in, decided to take over. What does that mean for the people who have accounts with Washington Mutual? Are they completely safe no matter what kind of account they have?
SINGLETARY: Well, you're safe if you're within the limits. And most Americans are within the limits. Most of us don't have $100,000 or more sitting around in an account. So, you're assured for that. If you have more than $100,000, then you really need to look at your account to see if you are covered for the insurance. And that's an important thing, because you could lose some money. But, if you're under that limit, you should be fine. And if you've got a mutual fund account, those assets are held in trusts separate from the corporation's funds, so you should be fine.
NGUYEN: All right, one other thing very quickly and this is important especially as we look at this bailout plan. Congress is working on whether they're going to cut some of these golden parachute plans which is allow CEOs to walk away with millions of dollars even after a company has failed. Let's take WaMu, for example, its CEO, Alan Fishman, been on the job for only three week, but could walk away with $18 million. How important is it to curb these golden parachute plans?
SINGLETARY: I think it's key to curb those. If nothing else, to ensure the American folks while we're laying out all this money for these people, they're not walking away with this kind of money. And I think also they should be paying attention to the homeowners that are the core of this. I mean, all of these different bailouts versions don't get at why -- how we're going to help the people whose homes are being lost. And if there's not something in the bill about that we should not let this happen.
NGUYEN: So you're unhappy with it, you're saying it's only helping out the big fish and not the little guy who's really on the hook for the bill? SINGLETARY: All I have to say is one word, Iraq. So, we're going trust that they know what they're doing. They haven't been knowing what to do up to this point. I think it's a bad bill the it -- last one I saw.
NGUYEN: Well, we'll see how it really plays out because they're still hammering away and we'll see the final cut of it and what is cut, indeed, out of it. All right, Michelle Singletary, columnist for the "Washington Post," thanks for your time today.
SINGLETARY: You're welcome.
HOLMES: That's like we've been talking about this morning, very important day, you need to keep it tuned in right now, because we could see history made with this bailout package. It is pending we understand right now, we could see it any moment.
NGUYEN: Right, they say they have made good progress on it. So, who's going to be paying for all this? We've been talking a lot about that. Plus the first debate of the season, it is over, and here comes the new ads.
(COMMERCIAL BREAK)
HOLMES: A tragedy we're following out of suburban Washington, a medical helicopter crashes early today, four of the five people onboard dead. We've got details coming up.
NGUYEN: Also mourning a film legend. Colleagues and fans react to the death of actor Paul Newman.
HOLMES: Also, the big bailout it's been called, now. They have been working around the clock. Negotiators hope to have a final deal on this legislation to shore up the U.S. financial system, hope to have it by sometime this evening. We could have it at any moment. We have our people all over Capitol Hill and the White House, also on Wall Street, Susan Lisovicz...
NGUYEN: And on top of that, like we said, it could happen at any moment. Good morning, thanks for being with us today, I'm Betty Nguyen.
HOLMES: And hello to you all, I'm T.J. Holmes. The nation's bills already more than most of us could even fathom and now the government is talking about handing out another $700 billion? How are we going to deal with that? Our Christine Romans checking the piggybank for us.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN NEWS CORRESPONDENT (voice over): Just where is $700 billion going to come from? Where it always does.
UNIDENTIFIED MALE: Treasury doesn't have $700 billion in a big old safe. We have to go borrow it. ROMANS: The piggybank is already empty and the government is borrowing to the limit. To pay for the bailout, Treasury Secretary Henry Paulson wants Congress to raise the debt creel to go a staggering $11.3 trillion. Talk about living beyond your means. Filmmaker and author of "I.O.U.S.A.," Addison Wiggin.
ADDISON WIGGIN, I.O.U.S.A.: That many gets tacked on to the bill that we're passing on to future generations.
ROMANS: Wiggin calculates the bill for everything promised but hasn't yet paid for, like Social Security and Medicare nears $53 trillion. And by the year 2010, your share will reach $38,000.
WIGGIN: The government is running -- is spending beyond its means to a level that, you know, private citizens could never even imagine and even Wall Street banks wouldn't dream of.
ROMANS: And that's before the proposed $700 billion Wall Street rescue. That's got Congress wringing its hands-off the enormous taxpayer-funded bailout and the candidates fine tuning their messages. Many economists say big tax cuts and new healthcare programs get less likely by the minute. Ballooning deficits are more likely. It's still unclear how much this would really cost.
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: I recognize that this is always due to the $700 billion program, but, again, the fiscal cost of it is going to be much, much less than that.
ROMANS: Because the government hopes to some day sell the toxic securities it buys from the bank.
Christine Romans, CNN, New York.
(END VIDEOTAPE)
NGUYEN: Well, Barack Obama already commenting this morning on the late night bailout breakthrough. No doubt, we will hear from his opponent, John McCain, this morning, as well. CNN's deputy political director, Paul Steinhauser is aboard the CNN Election Express in Memphis, Tennessee.
Paul, what did senator Obama have to say? Because both of them will be talking any minute now.
PAUL STEINHAUSER, CNN POLITICAL DIRECTOR: Yes, Senator Obama putting out a pretty stern statement. He said this bailout, this proposed bailout is a necessary step, but saying this is no cause for celebration. He says Wall Street does need to be bailed out, otherwise the whole economy could be taken down and hard working Americans with them.
Barack Obama on the way to Detroit today it campaign with Joe Biden, he's been making a lot of calls to Congressional leaders. John McCain as well -- he's in D.C. Today making a lot of calls, keeping him in touch with the progress. Both candidates, you're going to hear from them as well, as you mentioned, on the Sunday talk shows and throughout the day, they'll be talking about this. Betty, we can't escape it, this is the only topic right now on the campaign trail.
NGUYEN: Well, you know, another thing that you can't escape obviously, these political ads. We've already seen a couple of them out straight, you know, out of the gate, right after the debate.
STEINHAUSER: Yes, the Obama campaign didn't waste much time at all. About 12 hours after the debate was over, they put out an ad called "Zero" and it is a mention that in the Friday night, the first presidential debate, John McCain didn't mention the middle-class once, not once at all, just zero times. And they're saying that shows he's out of touch with average Americans struggling in these tough economic times.
The McCain campaign is out with their own ad, as well, using Joe Biden's words against Barack Obama. They're using clips from Joe Biden from a presidential debate back in the primaries when Biden was running against Obama for the Democratic nomination. In it, Biden is critical on Obama's vote on Iraq war funding and they say in the ad this shows that Obama is not ready to lead. So, both candidates using these ads. The Biden ad is no surprise, Betty, because refer the VP debate is this Thursday in Saint Louis, that's where we're headed. The Election Express bus is on the way to Saint Louis. A lot of eyes will be watching that debate Thursday night.
NGUYEN: No doubt and watching very closely. And I imagine both will be preparing intensely for this. Have you heard from either camp?
STEINHAUSER: Yes, the Biden is going to be with Obama today on the campaign trail, but he'll be kind of getting ready for the debate. Sarah Palin has been in Philadelphia, nonstop, since last Thursday. She is getting ready for this debate. A lot of people will be wondering if she can match up with Joe Biden considering Biden's been in the Senate for 30 years and she is more after relative novice -- Betty.
NGUYEN: All right, we'll be watching closely. Thanks so much, Paul Steinhauser joining us live.
You know, the presidential election is just a little more than five weeks away. And you are listening to every word the candidates are saying, so are we. But our Roland Martin is going to tell what you they're not saying. Join him tonight, 8:00 Eastern, right here on CNN.
HOLMES: Right, the latest polls indicate this election is in the hands of the undecided voters. So, we got three people who are going to decide this election. There they are. I got Andy, I got Cynthia, I got Tony here. They're gathered. I'm going to go over and have a little chat with them about the debate, what they saw, what they liked, what they didn't like, and have they made up their minds already. Come on people.
(COMMERCIAL BREAK)
NGUYEN: Well, during a serious palatal season, they provide the comic relief, shall we say. We go "To the Top" now to meet two brothers who made a living poking fun at the powers that be.
(BEGIN VIDEOTAPE)
GREGG SPIRIDELLIS, JIBJAB: The conservative bloggers say we're liberals and the liberal bloggers say we're conservatives and that's how we know we're doing our job right.
NGUYEN (voice over): Brothers Gregg and Evan Spiridellis can laugh now that their company JibJab is a pillar of Internet comedy, but if start the out small in a Brooklyn basement. Gregg, fresh out of business school, introduced the Internet to Evan, animator.
G SPIRIDELLIS: We've got this thing called the Internet which is just wide open and we can build a worldwide audience for the work and that was the naive idea that kicked off JibJab.
NGUYEN: After the dot com bust, the brothers did everything from publishing children's' books to creating gag gifts. They moved to L.A., but didn't lose sight of their original plan. During the 2004 presidential campaign, they debuted the video "This Land."
G SPIRIDELLIS: We did like 150 thousand views the first day.
NGUYEN: Soon they were getting more than a million hit as day.
EVAN SPIRIDELLIS, JIBJAB: This land was truly like the culmination of the original, like, naive dream we had back in '97, '98. Honestly it all comes down to the audience. Without the audience, we wouldn't have a company.
NGUYEN: This July, JibJab released "Time for Some Campaignin'," adding a new twist. Viewers can star themselves in videos just by uploading their pictures on-line.
E SPIRIDELLIS: All of a sudden, it was all over the news when there was a flood of traffic some to the servers. I think we both breathed...
G SPIRIDELLIS: A collective sigh of relief when they said that was great, OK, what's next.
(END VIDEOTAPE)
HOLMES: All right, they have not made up their minds about the candidates just yet. They only have, what is it -- 37 days, I believe, that left. And the race is close, the undecideds could decide the election. A bit of irony, there. We've got three of those undecideds here in the studio this morning. And here are the indecisive. Andy Hurst, he's a 19-year-old college sophomore and registered Libertarian. Also Cynthia Hudson here, a 48-year-old executive assistant and registered Democrat. Still upset about the whole Hillary situation. We'll get into that with her in a second. Also, a Tony Chung, a 32-year-old housing counselor and registered Republican.
First, just quickly, you were undecided going into the debate? The debate, a lot of buildup, there. Just Tell me quickly, did the debate help you decide who you're going to vote for or did it help you lean one direction or another?
ANDY HURST, REGISTERED LIBERTARIAN: It did help me to lean, but I'm going to wait until I hear all the debates.
HOLMES: All right...
CYNTHIA HUDSON, REGISTERED DEMOCRAT: I'm leaning.
HOLMES: It helped you lean?
CHUNG: No, not really.
HOLMES: And you're still a Ron Paul guy?
ANDY HURST, REGISTERED LIBERTARIAN: Yeah.
HOLMES: All right. Well, we'll turn -- I want to show some video, here. We're going to get into the substance here in a second, of what they were talking about, but something else a lot of people talked about, McCain didn't really address Obama when Obama was speaking directly to McCain. He never looked at him, he never addressed him.
Now, this hasn't been talked a lot in the media and this is kind of a style issue, but you all let me know because I had a lot of conversations with friends about this. Did that make a difference to you one way or another, the body language and things that you saw in this? Tony, I'll ask you first.
CHUNG: Oh, definitely Obama came out and addressed McCain first and then McCain never looked at him. I noticed that coming up to the debate and...
HOLMES: Cindy, what did that say to you when you don't see him addressing the candidate?
HUDSON: I think it referred to how truthful he was speaking. I felt that if he had something to say that he was being truthful about, he could look at the person. And the fact that he wouldn't look at him, I thought is that really true what he's saying, does he feel that what he's saying has truth in it.
HOLMES: Andy, did that bother you at all?
HURST: I mean, I don't think anyone would argue that, you know, Obama is somehow not good at debating. I think he's very eloquent. He's just got it down. He's awesome at it.
HOLMES: Just got a better style, maybe.
HURST: Yeah, very much.
HOLMES: OK, let's go to some substance here, now. And a lot of the debate was about should we or should we not sit down and talk to Iran, specifically, without pre-conditions. Let's take a listen and we'll talk about it on the other side.
(BEGIN VIDEO CLIP)
JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: What Senator Obama doesn't seem to understand, that without pre-conditions, you sit down across the table from someone who has called Israel a "stinking corps" and wants to destroy that country and wipe it off the map, you legitimize those comments. This is dangerous. It isn't just naive. It's dangerous.
BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Senator McCain keeps on using this example that suddenly the president would just meet with somebody without doing any preparation, without having low level talks. Nobody's been talking with that and Senator McCain knows it.
(END VIDEO CLIP)
HOLMES: Andy, I will start with you, here. Did you certainly get the sense, and a lot of people did, but what did you think? It seems like McCain maybe found his stride when did he begin to talk about foreign policy and about these foreign governments. What did that speak to, what did that say to you, there?
HURST: I mean, I think McCain definitely, definitely opened up a lot during the foreign policy. That's something he knows about, that's something he actually has spent time doing. I think he definitely was better than during the economy.
HOLMES: Cynthia, do you get the sense? I know you're a registered Democrat even though you're still trying today what you're going do, but still on that as a foreign policy, sitting down and calling Obama dangerous in some of the things he wants to do.
HUDSON: I think I felt that Senator Obama held his own, there. Where we thought that he might not be strong in that area, he really stood out, he held his own. He was able to say exactly what he meant even though McCain kept pushing him the other way. He said, no, that's not what I said.
HOLMES: Tony, do you think he held his own, as well?
CHUNG: I actually agree with Cynthia that Obama won the Iraq debate and Iranian debate because he actually did come out and say he's willing to talk. And as a president, I think we have to address different nations and be willing to talk.
HOLMES: Let's turn to something else, another sound bite you all will certainly recognize. Let's roll this one and I'll get your impression.
(BEGIN VIDEO CLIP)
OBAMA: Well, I think Senator McCain is absolutely right that we need more responsibility. Senator McCain is right that the earmarks process has been abused. He's absolutely right. John's right that we've to make shall cuts. John, you're absolutely right. Senator McCain is also right...
(END VIDEO CLIP)
HOLMES: You can come back to me, here. I think you get the point, there. This is now being used in the campaign ad. Putting them back to back to back like that, we see how many times he said it. But, what do you think to hear this candidate who is -- essentially the guy he's running against and really competing with the policy, he still was saying on so many occasions, well, this guy is right.
HUDSON: Well, this is exactly why I started tooling is because I saw him reaching. Now, John McCain says he's a maverick? We don't need a maverick. We're looking for someone that will reach over, that will open up and listen to us the people, listen to Congress, listen to everyone and make a decision.
HOLMES: And I see you shaking your head. You're actually the Republican of this group, here, but still do you agree with that, that Obama -- you know, does that speak to you that he is reaching out, is willing to acknowledge that other good idea maybe, if he hears one?
CHUNG: Yes, I think that Obama has a perfect temperament to be able to deal with these kinds of foreign issues and foreign policies.
HOLMES: You don't sound like a lot of Republicans I've known.
CHUNG: Well, yeah, you know, I guess I'm a more moderate Republican. But, I think Obama could address certain issues, sit down and really know what's right and stand up for what's wrong.
HOLMES: All right, I want to roll one more thing here from McCain, actually. Something he said a lot during this debate. Certainly, I hope we have this one cued up. And Andy, I'm going to ask you about it on the other side.
HURST: OK.
(BEGIN VIDEO CLIP)
MCCAIN: What doesn't understand -- what he doesn't understand, it's got to be a new strategy. I don't think that Senator Obama understands. Senator Obama doesn't seem to understand. Senator Obama doesn't seem to understand. He doesn't understand.
(END VIDEO CLIP)
HOLMES: All right, did you get the point he's trying to make, there, Andy? Well, did you find that, did he get his point across to you that did he make the point that he's trying to say to people this guy is not ready? So he, consistently, some people found it condescending, like he was talking down, hey, young man you don't know what you're talking about. How did you take all that?
HURST: I mean, I definitely got that he was trying to harp on his, you know, his level of experience versus Obama's lack of experience. But, I mean, I personally think that I would have been a lot happier with the debates had both the candidates stopped, you know, sort of just sniping at each other and, you know, actually answered the questions. I heard a lot of sort of double talk.
HOLMES: Both of you all were shaking your heads, as well. Do you find that you get -- I know you all probably watched debates in the past, but do you find you get what you need out of this debates? Did you get what you needed out of this one?
HUDSON: Yes, I think I did because I know the platforms of both parties very well. And we didn't hear anything different about the platforms, but I looked at character. I look at what type of person that person was. How was he carrying himself? And I have to say, Obama looked presidential to me.
HOLMES: And all three of them -- I'm going to wrap, here. All three of you are involved, you're up-to-date, you know what's going on. Are these really more a matter of style, just to see these two on stage together, see how they carry themselves? You all know what the issues are. You know what they feel about them. Do you just need to see the style?
CHUNG: In terms of the style, yes, definitely a little bit because, like I said, I was voting for or thinking about Obama at one point because of his temperament and he carried himself pretty well in terms of the being gentle. And in terms of McCain, yeah, you know, he does lean a little bit toward his experience, but you could only go so far with experience.
HOLMES: All right, again, I think this guy snuck in under the radar on us like he's a Republican, I think he's a Democrat. No, again, Tony, Cynthia, Andy, all undecided, still. So hopefully you'll make up your mind at some point in the near future. I know you want to see all the debates. Maybe we'll have you all back. Thank you so for coming in, spending some time with us and talking to us about it.
And you can catch up on what you may have missed. You can tune in, watch CNN's John King with the best of the presidential debate, "Round 1" we'll have highlights, in-depth analysis tonight at 9:00 Eastern.
Betty, I will decide to hand it over to you.
NGUYEN: Well, that's a good decision. Because all eyes now are shifting to the vice presidential debate, so you'll be deciding on that one. Our cameras, though, caught up with one of the contenders last night. Find out what is he had to say.
(COMMERCIAL BREAK)
NGUYEN: (INAUDIBLE) cheesesteak run. Why is it making news? Well, because Republican vice presidential candidate, Sarah Palin, stopped by Tony Luke's in south Philly, yesterday. She grabbed a couple can of steak sandwiches and made her first public comment since Friday's presidential debate.
(BEGIN VIDEO CLIP) QUESTION: Governor, did you watch the debate last night?
SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: I did. I did. Oh, McCain did awesome. He was great. He was absolutely on his game...
QUESTION: Are you ready for Joe Biden next week?
PALIN: I am. Look forward to it. Look forward to getting to speak to Americans trough that debate, absolutely.
(END VIDEO CLIP)
NGUYEN: So if you're wondering, Palin takes her steak sandwiches with Cheese Whiz and onions. Stay tuned for the debate, of course.
HOLMES: I was wondering, Betty, thank you. We want to check in with Howard Kurtz in Washington, to see what's ahead on RELIABLE SOURCES. And you heard it there, she likes her sandwiches with Cheese Whiz and onions. How do you take yours?
HOWARD KURTZ, RELIABLE SOURCES: That was awesome. All right, coming up T.J. I'm just back from Mississippi with a firsthand report on how both sides tried to spin the press after the first presidential debate. And after such a substantive faceoff between Obama and McCain, why are some journalists more concerned with facial expressions and body language?
Katie Couric sits down with Sarah Palin and even some conservatives are cringing at the results. We'll analyze the interview that made the governor seem a little more like Tina Fey. Plus, two of the nation's top commentaries why the media initially embarrassed the huge federal bailout bill that might pass today, but now it turned sharply negative. That and more ahead on RELIABLE SOURCES.
HOLMES: All right, Howie, we will see you in at the top of the hour, about seven minutes away. Thanks, buddy.
NGUYEN: But, in the meantime, it is the stuff of fairytales. All right, here goes. Someone hands you a half million dollars and calls you a genius for what you do.
HOLMES: That would never happen.
NGUYEN: That will never happen to either of us.
HOLMES: Well, yeah. We're going to tell you about this dream that's come true. That's next.
(COMMERCIAL BREAK)
HOLMES: All right, well, we certainly know that our viewers are quite the intelligent bunch.
NGUYEN: Absolutely. HOLMES: But any of you geniuses out there?
NGUYEN: Yeah, any of you a genius? If so, maybe you'll get a call out of the blue from the MacArthur Foundation. How does a half million bucks with no strings attached sound? Pretty good, right. Josh Levs obviously didn't win it, but he's here to talk about it.
Hey, Josh.
JOSH LEVS, CNN NEWS CORRESPONDENT: Every year I go through the same heartbreak. Every year I'm reminded that I'm not a genius, it's so painful. But this is so wild, I mean, these people are just going about their lives and it's top secret and no one tells them anything. They don't even know they're nominated, it's a secret process.
Now look, let's zoom in on the board for a second. I want to show you this. We've got a fiction writer, we've got an urban farmer -- let me just scroll all the way through, so there's 25 people -- lots of doctors in here, some teachers. You get a phone call and all of a sudden you're half a million dollars richer. This guy's a saxophonists in New York. So, I thought if he would play for us a little bit, since he's a sax genius, it would be the perfect way to end our show on Sunday.
So, when interview him the other day, I asked for just that. Let's watch.
(BEGIN VIDEO CLIP)
Look, our viewers are going crazy, right now, this thinking -- I've got to hear this guy. Pick up the sax for us. You brought it with you, all right? Play a little bit for us so people can hear your genius in action.
MIGUEL ZENON, MCARTHUR GENIUS GRANT WINNER: Well, I'll try. I'll try to live up to it.
LEVS: Not to oversell it, let's listen.
(MUSIC)
LEVS: Oh that was -- hey, sounded like genius to me.
(END VIDEO CLIP)
His name is Miguel Zenon. You can see the whole thing up in our air later today, the interview, what's he going to do with the money. And quickly, I want to show you want they said about him, so you understand what you just witnessed. They say: "This young musician and composer is [at once] reestablishing the artistic, cultural, and social tradition of jazz while creating an entirely new jazz language for the 21st century." So, I guess that's what we just got a taste of. Huh? Not bad on this show on a Sunday.
HOLMES: That is genius.
NGUYEN: Yeah.
HOLMES: That is genius.
NGUYEN: Worth some money, some cold cash apparently, too. All right, thank you, Josh. Maybe next year, you know? We'll try to nominate you.
LEVS: Thanks.
NGUYEN: Good luck with that. Howard Kurtz is back in a minute for RELIABLE SOURCES. Then expect the best political team on TV to join Wolf Blitzer on LATE EDITION.
HOLMES: His guests today include chairman of the Financial Service Committee in the House, that's Barney Frank. High topic, of course, the Wall Street bailout plan. But first, we got a check of your morning's top developments.
So, congressional leaders say a deal on that massive $700 billion Wall Street bailout plan could come today. Democratic senator, Kit Conrad says the tentative plan could distribute the $700 billion in stages, establish an insurance program to reduce taxpayer losses and include some curbs in executive compensation.
Well, the presidential candidates monitoring the bailout talks from the campaign trail. Barack Obama and John McCain scheduled both, to appear on Sunday talk shows. McCain has no other public events today, Obama, however, does. He heads to Michigan for a voter registration rally.
And a medical helicopter crashed overnight while carrying traffic accident victims to a trauma center. Four of the five people who were onboard were killed. One of the survivors actually was one of the patients who was being carried. This helicopter went down in suburban Washington.
And also, Hurricane Kyle headed towards Maine? It's actually headed across the North Atlantic, on track for Nova Scotia, now. The storm is triggering Maine's first hurricane watch in 17 years. Kyle could hit later today or early tomorrow, and expected to hit somewhere between Maine and Canada.
Just some of your headlines, right now. More top stories your way in 30 minutes, but right now, let's hand it over to RELIABLE SOURCES.
