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Spending Billions on Bad Debts; Why Small Banks are Thriving; Should Geithner Resign?; Bargains in Dubai, Stocks Rally on Treasury Plan, Housing Report, Banker Drives Cab; Financial Boot Camp
Aired March 23, 2009 - 10:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
T.J. HOLMES, CNN ANCHOR: It is Monday, March 23rd. Here is what we're working on in this hour of the CNN NEWSROOM.
Spending billions on bad assets, the latest plan to rescue the economy reveals this morning. And so far, it appears Wall Street likes it.
Also, a fiery plane crash into a cemetery. Tragedy in Montana takes the lives of seven children, as well as seven adults. This morning, federal investigators searching for the answer.
And also Katrina's legacy: concrete slabs and weeds in New Orleans' Lower Ninth Ward. Is this the new normal for the Big Easy?
Good morning to you all. I'm T.J. Holmes sitting in today for my friend Tony Harris, and you are in the CNN NEWSROOM.
All right. The Obama administration launching its latest attack on the worst banking crisis we've seen in 70 years. This morning, the treasury secretary, Timothy Geithner, revealed details of the plan to buy up banks' bad debt. You know, those so-called toxic assets you've been hearing a whole lot about. The ultimate goal here, to get banks lending out to businesses again and get lending going to people like you and me, the customers.
Now, under the plan, private investors will be teaming up with the government to buy bad these bad debts. The FDIC will auction off these debts like troubled mortgage loans. The agency will then provide the financing to the winning bidders in those auctions. The federal government hopes to provide enough support to buy at least $500 billion and perhaps up to a trillion dollars in bad assets.
That's the overview. That's what I can give you, generalities.
Christine Romans, we've got to check in with her to get all of the details of this. She's in New York for us, of course with the CNN money team.
All right. Do I have this right, Christine? Am I hearing this right?
It sounds like the government is about to set up, essentially, a yard sale for all of this bad junk that you're trying to get rid of, and pretty much setting up potential buyers with the people trying to get rid of this junk. CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's a pretty good way of looking at it, T.J. It really is.
Trying to set up a yard sale, but it is trying to coax the people who have the junk and coax the neighbors to buy the junk. Coaxing everyone to try to get them together so they can move this stuff out of the basement and sell the House, or at least get the House up and running again. I don't know, maybe that's a mixed metaphor. But let's take a look at what the nuts and bolts are here a little bit.
The government's going to put up $100 billion here, up to $100 billion, creating this public/private partnership. That means essentially that, with your money and my money, taxpayer money, they're going to seed this big new fund to try to buy this stuff up and get a market going again.
The government's going to finance up to about 50 percent of this. So again, this is partners between the government, taxpayers, T.J., and -- you know, and the banks, trying to figure out how to cleanse the banks' books. Once the bank's books can be cleansed, then the hope is private investors can start to invest more money in the banks and they can start lending again.
HOLMES: OK. And how telling is this, Christine? A lot of people maybe certainly would take note that the treasury secretary, unlike the last big announcement he had, he didn't stand up in front of a microphone or reporters or any audience. He just kind of handed in this homework assignment and did an op-ed in "The Wall Street Journal," as well.
Should we read anything into that?
ROMANS: No, I don't think you should read anything into it. I think that the last time he came out and gave some broad brushstrokes on what this is going to look like, the market tanked.
Over the past six weeks, there's been a lot of work on the details, there's been a lot of work done reaching out behind the scenes to try to make sure that they have the best mix that they possibly can. And sitting down, you know, overnight, talking to reporters, sitting down with reporters this morning, trying to get all of the details out. I mean, I know he's going to be on CNBC at 2:00, Ali Velshi interviewed him last week.
I mean, he's been out there talking to people. Now they're just trying to get the work done, I think.
He did write that on-p ed in "The Wall Street Journal," and he had a really good point in there I think that it's important to make out. And that is that, look, "Simply hoping for banks to work these assets off over time risks prolonging the crisis and a repeat of the Japanese experience." The Japanese experience, of course, is 10 years of recession and no growth. And it was not pretty at all.
No one wants to repeat that here in this country. And he was talking essentially about why you need the private partnership, why you need the financiers, and why you need Wall Street and their money to try to help us get out of this mess.
HOLMES: Yes, why we need them, but will one of the challenges certainly be trying to get them get involved? Why would anybody in the private sector, an investor, want to buy up this stuff we keep calling junk and toxic?
ROMANS: Yes, and my sources on Wall Street this morning are, to a person, telling me they wished this had happened before the AIG bonus outrage of the last week. They say it's much less likely, in their mind, that some of the private groups that would have otherwise stepped in to partner with the government, they're going to be worried about Congress coming in after the fact and trying to tax away their profit, you know.
They're worried about a little bit about some of the vitriol for Wall Street over the past week or so. So attracting the private investors is going to be a challenge, although it sounds like the administration is hopeful that that's not going to be too much of a limit.
Also, the executive compensation limits. I mean, are you going to have financiers who are going to want to agree to some of these limits? Are you going to have to waive those limits and risk hurting public support for this?
You know, you have to convince the private sector that they should do business with the government, and you have to convince the government and the public that, hey, it's OK to do business with capitalists after all. I mean, it was kind of a rough week last week, T.J., for the relationship between the public, Washington and Wall Street, wasn't it?
HOLMES: Yes, you think? And it's kind of tricky now.
Hey, come do business with us even though we've been changing the rules up and you've got to play by our rules. And that's a tough sale to make.
Christine Romans, as always, we do appreciate you breaking this stuff down for us.
HOLMES: And we hear so much about the big commercial banks out there struggling to stay afloat, but would you believe some smaller banks are doing just fine? And even booming in some cases.
Jason Carroll explains their formula for success.
JASON CARROLL, CNN CORRESPONDENT: Well, T.J., they may not have the name recognition, but some startup banks say they can provide service that's just as good as the larger chains, and they say their customers' money is just as safe.
CARROLL (voice-over): Just as word spread several banking giants were buckling under the strain of the economy, a little known smaller bank was muscling its way into the financial world.
(on camera): You opened what, January, just about January?
ROBERT LONG, EXECUTIVE VICE PRESIDENT, HANOVER COMMUNITY BANK: Yes, we're open about two months now. I mean, there was some hurdles. I mean, we were raising money, literally, when people had newspapers in front of them saying that the banks were going out of business.
CARROLL (voice-over): Robert Long founded Long Island's Hanover Community Bank. It's considered small by industry standards, with less than $1 billion in assets. But unlike some bigger competitors with trillions, Hanover doesn't need a bailout.
(on camera): And so far, how have you been doing?
LONG: Well, we are -- we've exceeded our expectations.
CARROLL (voice-over): Hanover hoped to raise $20 million in cash by selling certificates of deposit, but ended up raising more than twice that.
LONG: We wanted to go back to the old days. We wanted to go back to face-to-face banking.
CARROLL: A key to success, knowing the customer asking for a home mortgage or business loan. It's a formula that's working around the country.
JAY GOLDSTEIN, PRESIDENT, VALLEY GREEN BANK: Business is very good.
CARROLL: Valley Green Bank, another community bank in Philadelphia, opened three years ago. Today, customer deposits are way up.
GOLDSTEIN: Every time there is bad news about, you know, one of the large banks, we sometimes have a line out the door of people transferring their deposits from those institutions to us.
CARROLL: Much like Hanover, Valley Green lends primarily to those from the community, like florist Herb Rothe.
HERB ROTHE, FLORIST: They gave us the attention that probably I wouldn't expect from any other big bank.
CARROLL: But some financial experts say there can be a downside to small banks.
BART NARTER, SENIOR VICE PRESIDENT, CELENT RESEARCH'S BANKING GROUP: You need Bill Pay, you need mobile banking, you need all these things that a small bank just doesn't have the mass to deal with.
CARROLL: Hanover says technology isn't everything.
LONG: When you call an 800 number and you get somebody that's not in this country, I don't think that's banking, to tell you the truth. That's technology.
CARROLL: And some customers joke these startup banks have another advantage.
ELEANOR PLATIS, CUSTOMER, HANOVER COMMUNITY BANK: I think they're starting clean. And it's going to take a while before they get into trouble.
CARROLL (on camera): T.J., some banking experts say one of the problems community banks can run into getting off the ground is passing all of the financial tests the FDIC, the Federal Deposit Insurance Corporation, requires in order to get backing on customers' deposits. The banks we profiled file met those requirements, now Hanover Bank says it may open more branches very soon -- T.J.
HOLMES: All right. And thanks to our Jason Carroll there.
And next hour, President Obama making the case for investing in clean energy and new technology. We'll bring you the president's remarks live. That will be 12:30 Eastern, right here in the CNN NEWSROOM.
And then tomorrow night, the president facing reporters and the cameras during a live news conference. CNN will be there until every question is asked and answered. Our special coverage begins at 7:45 Eastern Time right here.
We've got two horrific and deadly plane crashes to tell you about. We'll start in Montana, where seven children, 14 people all together, dead after a single-engine prop plane went down just 500 feet from the runway.
The flight plan shows the plane was headed from California to Bozeman, Montana, but had to be rerouted to Butte, Montana. The plane nose-dived into a cemetery. One witness said she and her husband had rushed over to help. They got there though, and it was too late.
(BEGIN VIDEO CLIP)
MARTHA GUIDONI, WITNESS: When you see it on TV, you go, "Oh my God. That's awful." When you see it in real life, you go, "Oh, my God. That's more than awful."
(END VIDEO CLIP)
HOLMES: Nobody on the ground was hurt. It's believed the people on board were headed on a ski vacation.
The other one to tell you about, this one was in Tokyo, Japan. A FedEx cargo plane burst into flames. Two American crewmembers were killed, and this was early this morning.
Now, the video here is just horrific. The plane was coming in for a landing. Look at this. It bounced on the runway, at least a couple of times, then veered to the left, and then as you see there, exploded. Officials say wind sheer may have been a factor in this crash.
Well, the treasury secretary, Timothy Geithner, announcing a plan to buy toxic assets from the banks. A lot of questions now about will this thing work? Another question a lot of folks are asking, is he going to keep his job?
Florida Congressman Connie Mack does not want him to keep his job. He'll be joining us right here in the CNN NEWSROOM.
Stay with us.
HOLMES: President Obama says Treasury Secretary Timothy Geithner is not going anywhere. Geithner has come under fire after the administration's attempts to revive the economy. In his interview with CBS's "60 Minutes," the president says he is standing by his guy.
(BEGIN VIDEO CLIP)
STEVE KROFT, CBS CORRESPONDENT, "60 MINUTES": Your treasury secretary, Tim Geithner, has been under a lot of pressure this week, and there have been people in Congress calling for his head. Have there been discussions in the White House about replacing him?
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: No.
KROFT: Has he volunteered to, or come to you and said, "Do you think I should step down?"
OBAMA: No, and he shouldn't. And if he were to come to me, I'd say, "Sorry, buddy. You've still got the job."
But look, he's got a lot of stuff on his plate. And he is doing a terrific job. And I take responsibility for not, I think, having given him as much help as he needs.
(END VIDEO CLIP)
HOLMES: Well, Republican Congressman Connie Mack -- want to bring him right in -- of Florida is one of, if not the first, congressman to say that Geithner should go.
Representative Mack, I appreciate you being here.
You just heard the president in that sound bite there say that his guy is doing a terrific job. Geithner is.
What do you think when you hear the president say that he believes the man you think should go is actually doing a terrific job?
REP. CONNIE MACK (R), FLORIDA: Well, obviously I disagree. And I don't know how you can look at Secretary Geithner and have any confidence.
Whether it was the nomination process and the issues on his taxes, to his original -- one of the original architects of the bailout bill and now wanting more money, the problem we had in the -- with AIG, this is not someone who instills confidence. And we are in desperate need of confidence. I hope that the president would reevaluate his position, because the way to move forward is we need to bring someone in that the American people can have confidence in, and Secretary Geithner is not the person.
HOLMES: Have confidence in, and you have said that "Geithner should step down for the good of the country." Now, every day that he is still holding the post of treasury secretary, do you believe that harm is being done to this country?
MACK: I believe he is impeding our ability to move forward. And again, it goes down to confidence. And this just isn't me talking.
There have been Republicans and Democrats who are skeptical. And I think more people need to come forward, and to ask for him to step down or resign, so we can bring someone in that has got the skill sets and that the American people can have confidence in to get our economy moving.
HOLMES: And you say someone there. Who would you like? And if you don't have a name, what type of person. Because he comes with great credentials, this Timothy Geithner. A lot of people saying he's a really sharp guy.
So do you have a name? Or what type of guy who has a different background than Geithner does, and experience than Geithner, would you like to see?
MACK: Well, I think, again, this is something that the president will have to look into and make that nomination, and go through the Senate process. That's one of the responsibilities of the president, but we clearly need someone who has got the skills to handle the jobs and who can instill confidence in the American people and the taxpayers. And in my opinion, Tim Geithner is not the person.
HOLMES: He's not the person. Did you want him to resign before this whole AIG mess about these bonuses really came down hard last week? Did you want him to go before that, or was that the last straw?
MACK: Well, you know, I was disappointed in his confirmation in the first place, to be honest, and I also -- and then everything after that kind of leading up to AIG just kept eroding this confidence that people have in him. And I think that later on today, you're going to see a press conference where the president is now going to have to come out and hold his hand at a press conference to try to regain some of that confidence.
HOLMES: Well, you say hold his hand there. Isn't that what the president should be doing, what maybe the American people should be doing, maybe what members of Congress should be doing, is showing some confidence and support? And also, it's only been 60-plus days. Should we give the guy a little more time? Should you give him a little more time maybe for some of his plans to maybe try to work?
MACK: Again, I think we need to have someone that the American people can have confidence in. And the American people do not have confidence in Tim Geithner.
And the president, now having to come to his rescue and hold his hand, you would rather have someone in who could stand on his own two feet and navigate this economy to a growing economy. And we're just not seeing that right now.
HOLMES: Not seeing it. We heard from the president on "60 Minutes" last night, and you talked here that we might see another one of these moment today with the president, as you say, holding his hand. But let's take a quick listen to something else the president said about Timothy Geithner. This was just last week.
Take a quick listen, and I'll ask you about it on the other side.
(BEGIN VIDEO CLIP)
OBAMA: I have complete confidence in Tim Geithner and my entire economic team. Understand, as I said before, Tim Geithner didn't draft these contracts with AIG. There has never been a secretary of the Treasury, except maybe Alexander Hamilton right after the Revolutionary War, who has had to deal with the multiplicity of issues that Secretary Geithner is having to deal with all at the same time.
And, you know, he is doing so with intelligence and diligence. Nobody's working harder than this guy.
(END VIDEO CLIP)
HOLMES: All right. We hear once again the president there supporting his guy. You said he's going to be coming out and holding Geithner's hand again. But at what point do you start to stop pointing the finger at Geithner and maybe pointing it directly at the White House and the president if he has a guy that you say should not be doing the job? Well, if the president has this complete confidence in this man, then when will you start holding the president responsible for Timothy Geithner?
MACK: Well, I think when you're in a leadership position, you're always responsible. So I agree with the message that -- or the question that you're asking. And I think that's why I've asked the president, if he doesn't offer his resignation, that the president ought to ask for his resignation, because ultimately it does stop with the president. And we need to have someone, again, in office and this position that the American people can have confidence in so we can get this economy moving forward. HOLMES: All right. And last thing, sir. I have to get this in. They're wrapping me here, but if you can give me just a quick answer.
Do you think the bonuses should still be recovered? I know you voted against that 90 percent tax on those bonuses, but do you believe we should be going after them and trying to recover them in some way or fashion?
MACK: Again, this goes back to the question to the secretary, Secretary Geithner. What did he know? When did he know it? Who did he tell? Why didn't he stop it?
HOLMES: But do you believe they should be recovered? Do you believe the government should be trying to get those bonuses back, that $165 million-plus?
MACK: I don't think they should have been paid out in the first place.
HOLMES: But now that we're here, should we be trying to get them?
MACK: I absolutely think that the right thing to do would have been for those bonuses not to have been paid.
HOLMES: All right. Well, I'm going to have -- you and I might be going back and forth about this one all day. I'm going to have to let you go there.
Representative Mack -- go ahead. You want to clear it up?
MACK: Yes. No, I just wanted to say the absolute wrong way to go is to put forward a punishment tax that's only suited for kings and tyrants. That does not instill confidence. Why would an investor now say I'll go and buy some of these toxic assets when they're going to be worried that the federal government's going to come back around and maybe impose a tax on them?
HOLMES: So I hear right, AIG should keep those bonuses? Are you saying that?
MACK: Well, again, I'm saying that they should never -- Geithner had the authority and the power not to have them paid, and he chose not to act.
HOLMES: All right. Well, Representative Mack I'm going to have to call you on your cell phone, and we might have to keep going around and around with this one. But I've got to go right now.
Representative Mack from Florida.
MACK: All right.
HOLMES: Sir, we appreciate you taking the time with us. MACK: Thank you.
HOLMES: Well, a lot of people out there grateful to have a job, but you'd certainly like more money, would you not? Personal Finance Editor Gerri Willis has her top tips to, yes, get a raise. CNN's "ROAD TO RESCUE: THE SURVIVAL GUIDE."
HOLMES: All right. A lot of companies out there that are feeling the squeeze around this country. A lot of companies are laying off, others are simply just freezing salaries. A new study showing that 42 percent of employers have frozen salaries, in fact.
But CNN Personal Finance Editor Gerri Willis has got some news for you that you can use.
Gerri, you can still get a raise right about now? How do you do this?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: That's what I'm saying.
Well, OK, T.J., getting a raise is certainly more difficult than it's been in the past. But look, it's not impossible.
Your value as an employee is not totally dependent upon the economic conditions of the time. It's really all about what you bring to the company and the market value of your services, and putting together a good strategy, well, that is key. Here are some dos of getting a raise.
First off, you've got to time it right. You want to make this request after you have a large achievement. Maybe you've gotten a new client for the company, brought in some -- landed some big account. That's the time to ask for a raise.
Highlight your accomplishments for the company. How have you contributed to the company's bottom line? You want to be flexible and let your boss know that you understand that times are tough, maybe you don't get the raise you wanted, but you can negotiate maybe for something like work-at-home Fridays.
HOLMES: That's not a bad idea there. I don't think that would work for us, Gerri, but it sounds pretty good, work-at-home Fridays.
Now, you talked about things that people should do.
HOLMES: So of course there has got to be a list of things you should not to do. And I assume saying give me a raise or I'll quit is one of them.
WILLIS: Well, you know, you've got to be careful how you do it. But here are the no-nos. OK. No begging, no whining, no getting angry. You don't know how tenuous your job might be.
Don't make it about you, don't base your case for a raise on the fact that your personal expenses have gone up. If the light bill's higher, you can't ask for a raise in this environment.
And don't be unrealistic. Have an idea of the parameters you can play within. Know what other people who do what you do are being paid. That's going to help you make this argument, really, you're making your employer about the need for money, why you should be the person to get the extra dough.
HOLMES: All right. So the begging is bad. I should have talked to you before.
WILLIS: I can't see you doing that.
HOLMES: OK. All right. Well, the whining maybe.
All right. What if you do want a raise? I mean, times are tough.
HOLMES: So what should you do, then? Do you still have options? What should you do in the meantime if you think you've just hit a wall?
WILLIS: Well, OK. So the boss says no. What do you do? Well, you have to be persistent.
Ask the boss if he or she will consider maybe a second meeting six months down the road, perhaps an accelerated annual review. And look, if you can't get the raise, take the long-term view and think about how your company can help you take the next step on your career path. Of course you won't tell your boss that's what you're doing. Ask your employer to pay for additional education, training, career development courses that will raise your value despite the economy.
And if you have any questions, send them to me at firstname.lastname@example.org. We answer those questions right here every Friday.
HOLMES: Those were some outstanding tips today. Very useful. Now, a lot of people not thinking about getting a raise right about now. It just seems like that would be something that's impossible.
WILLIS: Why not? Somebody in your office is asking for one, right? It might as well be you.
HOLMES: It might as well. No begging, no whining, though. That was the most important tip of the day.
Gerri, always a pleasure to see you. Thank you so much.
WILLIS: Thank you, sir. HOLMES: See you again soon.
Well, the government's stimulus plan giving a shot in the arm to one New York City health care center. You can go to our cnnmoney.com, click on "Road to Rescue." Again, that's at cnnmoney.com where you can find that.
Well, job layoffs have hundreds of people considering some new careers. Take, for instance, the cab driver who wears a tie.
(BEGIN VIDEO CLIP)
STAN GRANT, CNN INTERNATIONAL CORRESPONDENT: Hi, I'm Stan Grant in Dubai, where you can actually ski while you shop.
I'm in one of the largest shopping malls in the world. In fact, you could say that shopping is an art form here. Wholesale and retail make up about 40 percent of the gross domestic product of the United Arab Emirates. But the recession is starting to bite. Just speaking to people here today, they're saying that they're thinking now before they buy. They are checking out the bargains.
But everyone I've spoken to says the same thing. If you still have a job in the United Arab Emirates, you're doing OK.
(END VIDEO CLIP)
HOLMES: That's a way to put it in perspective. Doing OK there in Dubai. That was our Stan Grant, one of the CNN international correspondents keeping you informed about the global recession.
Wall Street, meanwhile, has a reason to celebrate, maybe. Today, the government unveiling its biggest effort yet to tackle the financial crisis. And we've had signs of life in the housing market.
Susan Lisovicz on the floor of the New York Stock Exchange. Is this an upbeat business hit you're about to give me right now?
SUSAN LISOVICZ, CNN CORRESPONDENT: How about that? That is of itself a headline. It is true, T.J. We have some very positive news, and we're seeing a huge rally that started in Asia and continuing right to Wall Street.
Take two for the Treasury Department on how to restore stability to our banking sector. The last time, last month, Tim Geithner announced it, well, they were short on details according to folks here on Wall Street. And the Dow sold off nearly 400 points in that day. Right now the Blue Chips are up nearly 300 points.
The plan is to commit up to a trillion dollars in a public- private partnership in which the government will take some risk, but hopefully there be some reward. Wipe those toxic assets off the balance sheets of banks and the banks start lending again. That's the idea. A lot of questions yet, but investors like it.
Banking stocks up huge. Citigroup and banking - and Bank of America each up in the double digits, of course. They're very cheap. They've been pummeled for months. But check it out, nice big rally. As I've mentioned, we've seen worldwide. It shows how interconnected this economy is.
And your reporters were just talking about that. When we sneeze, everybody gets a cold overseas.
HOLMES: Yes, we are all in this thing together. We will continue, though, with some upbeat news. And hey, we'll take anything right now. But a housing report out, and we have some sales, at least last month, show some signs of life. We'll take it.
LISOVICZ: Yes, we got housing starts last week, surged 22 percent. Now we have existing home sales, the vast majority of the housing market, up 5.1 percent in February.
T.J., that was the biggest jump in nearly six years. Why is that you ask? Well, because they're so cheap. Nearly half of the sales were for foreclosed property.
The National Association of Realtors says sales activity remains relatively soft because of additional layoffs. But also, folks waiting for housing provisions in the economic stimulus plan to kick in. At the end of the day, T.J., we still have an 11-month inventory, compare that to three years ago when it was five -- we have a nine- month inventory now compare that to '06 when it was five months. So we still have to work down that glut of homes quite a bit.
HOLMES: Still got some work to do, but any time you give me numbers and tell me something's up instead of down, we will take it.
Susan Lisovicz on the floor for us today. Thank you so much.
LISOVICZ: You're welcome.
HOLMES: Well, how about this? A banker turned taxi driver. That story would have been highly unlikely before the recession. But as you know, things have changed.
CNN's Richard Roth with his story.
RICHARD ROTH, CNN NATIONAL CORRESPONDENT (voice-over): Laid-off workers like Michael Dick are turning to taxi driving to make money.
MICHAEL DICK, BANKER TURNED TAXI DRIVER: Its' amazing. You never get board.
ROTH: Dick was laid off after 13 years at the financial house UBS. A $75,000-a-year, back office job.
DICK: And I was promptly escorted out of the building. ROTH: Bank man now a hack?
DICK: Naturally, while I was working at UBS, I made a lot more money. However, I had ten times the amount of stress. The beautiful thing about this business is it's my own business.
UNIDENTIFIED MALE: What would you rate the public image of a new taxi driver?
ROTH: Don't complain you can't find a taxi, classrooms are packed as the newly unemployed mix with traditional immigrant cabbies. New York City says taxi licenses have hit an all time high, near 46,000.
UNIDENTIFIED MALE: Whenever the economy is doing bad, we do much better.
UNIDENTIFIED MALE: Eye contact is very important.
ROTH: When you see your next driver, it could be a chef.
UNIDENTIFIED MALE: I'm a victim of this economy. It's a lot less jobs, you know.
DICK: Berta (ph), I can't talk now, I'm driving bye-bye.
ROTH: A cabby with manners and speaks English well and wears a tie?
DICK: I mean, a pedestrian that was in harm's way, I might, you know, go like that to warn them, but I never do that kind of thing. It might be a that. To me, that's the way a horn should be used.
ROTH: By chance, his first passenger is a banker.
DICK: You know, young lady, I am the hired help, and you are the boss.
UNIDENTIFIED FEMALE: I think it's a wonderful thing that he picked himself up and found something to do.
ROTH: Not everybody was quick to praise.
UNIDENTIFIED MALE: You've got to be careful.
DICK: I will try to be more careful.
UNIDENTIFIED MALE: I've got passengers in here.
DICK: I apologize.
ROTH: He still misses UBS, which he drives by, but...
DICK: I'm a better fit as a cab driver than I was as a banker.
ROTH: A cab by banker doesn't faze the next passenger. UNIDENTIFIED MALE: Nothing surprises me today. You know, I was caught in the corporate downsizing.
ROTH: Michael Dick says his focus on customer service has brought large tips.
DICK: Cash - cash works.
ROTH: He's enjoying the ride.
(on camera): This is like a great life adventure for you?
DICK: This is. This is. This is like a Broadway show.
(END VIDEO TAPE)
HOLMES: All right. And our Richard Roth joins us now live from New York.
Sir, are you telling me that this is going -- is there a new crop, a new wave of cab drivers we're going to be seeing next time we visit New York?
ROTH: Well, the problem is there are too many drivers really chasing fewer passengers in this recession. They're lined up behind me here. It's still hard to find a cab, though, at 5:00 in rush hour or during the rain, though. Michael Dick, though, is retiring next year, so someone will take his place.
HOLMES: Now, is he -- is this genuine? We see some of these stories where people switch their jobs, had these high-paying job and take something in a coffee shop or driving a cab. Is this for real? Does he seem like that much more happier to be doing this and making less money than he was at UBS?
ROTH: Well, because he says he's a people person, and I personally observed that, and he's got some side businesses, he really is unique.
Look, many of the immigrants, their language skills are not as good as Michael's and they've got to work - unlike him, they've got to work for every dollar. He co-leases this taxi. He doesn't need the money as badly, I think, as the others you saw in that classroom.
HOLMES: All right. Well, maybe I will run into him next time I'm in New York.
Richard Roth, hope to see you next time I'm up there, as well. Good to see you, my man.
Well, the downturn in the economy has many people trying out their green thumbs to save some cash. Let's take a trip to CNN.com's iReport desk. Tyson Wheatley has the details. Manning his post as always.
Kind sir, good to see you. What you got going on today? TYSON WHEATLEY, CNN.COM PRODUCER: Hey, T.J.
Well, basically, what we're hearing is that in this economic downturn, some of you are saving some cash and eating healthy by growing some victory gardens.
Let's start with this great iReport that we got from Chris Morrow. She lives in San Diego and that basically affords her the ability to grow some vegetables on a rooftop garden year round. She's got an herb garden that consists of basil, she's got some chocolate mint. She's also growing some rosemary which she uses in a lot of her cooking dishes. You know, Chris has also grown some Italian herbs, some green beans, and this weekend she planted some wild flowers. You're looking at an indoor garden she's also got there in her kitchen.
All right, this next one I want to show you comes from the great state of Washington where Hillary Ohm lives in a town called Callvale (ph). And she's already planted a bed of garlic you can see here. In fact, in the northwest, garlic is actually planted in the fall and it's harvested sometime around in the summer. She likes garlic a lot, but the prices, she says, have gone sky high, so she's growing her own.
What's also cool about this iReport is that she went and visited some friends this weekend, you're getting a look at their garden. And they're actually starting the process of planting their victory garden right now that the snow has actually melted there. And they're growing some spinach, arugula, lettuce, kale, carrots, and some brussels sprouts.
And T.J., you know, you don't actually need a backyard to grow a victory garden. I've got some photos I want to show you. These come to us from a 16-year-old from Rocky Face, Georgia. His name is John Franklin. And check this out. He has -- he went down to the basement this December and found all of the stuff he need to build his own hydroponic garden. And he is now growing tomatoes and two basil plants to help bring some food to the family table. That's really excellent work there, John.
Pretty amazing work for a 16-year-old, don't you think?
HOLMES: That's good work for a 16-year-old, anybody right about now. But we see here, Tyson. I had a list of, I guess, businesses that were up during this recession. And the number one that was on a website, I can't remember what it was, was home gardening. A lot more people are doing it to save some money.
WHEATLEY: I'll tell you, we started asking this question just on Friday. And we already have three pages of fantastic responses.
So if you are planning to grow your own produce, this year, we want you to show us your victory gardens. Show us how they grow and check out everyone else's - iReport.com.
HOLMES: All, my man, Tyson Wheatley, down at CNN.com. We appreciate you, as always.
Some information we want to bring into our viewers here. We just got this, that Lance Armstrong is having to be hospitalized after he fell during a bike race in Spain. This seven-time Tour de France winner, of course, is a stud out there on these course. And this was a race, a comeback race some might call it, there in Spain that he was in. But he was seen by one of our people walking to an ambulance. Some reports that he possibly broken his collarbone. We don't have that confirmed just yet.
But again, Lance Armstrong apparently taking some kind of a crash during a five-day race he was in northern Spain. Don't know the extent of that injury or if he'll be able to continue this race. Just wanted to pass that information along. As we get more, we will certainly pass it along to you.
HOLMES: You got it squared away? A lot of stuff going on over here.
ROB MARCIANO, AMS METEOROLOGIST: A lot of stuff going on. I mean, not only do we have a lot stuff weather wise going on, T.J., but...
HOLMES: This thing.
MARCIANO: ... this volcano.
HOLMES: Now, all I see is pretty pictures. So you've got to break this down scientifically. Which not just pretty, it could cause problems, as well.
MARCIANO: It can. Luckily for this, Mt. Redoubt, which is 100 miles southwest of Anchorage, Alaska, it's in a pretty remote area. So, even if this eruption - which, if you're just tuning in, happening last night and has been ongoing throughout the day today. Now that the sun's just coming up. These pictures are not of today, but from when this thing started perking up a little bit. And it's been doing that for a couple of months.
So, seismic activity got ramped up, and they have since seen subsequent eruptions. And we talked with an expert in a couple of hours ago about just how violent those eruptions are. He said, fairly mild. Not like a Mount St. Helens thing where it blasts out much like a nuclear explosion would be. Or you're not -- you're not going to see lava coming down the sides, like you would in a volcano in Alaska. But you will see melted snow, what's called Lahar flows. You'll see ash boom.
If we could switch over to the weather switcher and or Google Earth, either one of those is going to show something interesting here. All right, we'll zoom in, give you a little bit of the lay of the land. This thing again, again, about 100 miles southwest of Anchorage in a chain of mountains there, which does include volcanic mountains. The most active part of this one, of this 10,000-foot peak, is the northern side. That's the drift glacier there, that's where the vent was which became active and now is erupting. And it'll be interesting to see just what these pictures look like as the sun comes up.
Also very interesting, what happens to the ash once it gets thrown into the atmosphere? Well, you've got different wind directions at different levels. And this animation kind of shows you how the ash will be distributed once it goes into the air. And at times, some of this ash is up well up and over 40,000 feet. So that will disperse it pretty quickly. And you can see as it gets higher into the atmosphere, it start to take on those westerly winds, which will take it over across Yukon of Canada.
The good news here, T.J., is that Anchorage's most populated city closest to that is northeast and it shouldn't be in the path of the ash that would be falling and the close by...
HOLMES: Any danger this could pose anywhere? I mean, to planes?
MARCIANO: Well, they shut down - Alaska Airlines shut down their flights, at least 17, at least. The last time this erupted back in about 20 years ago, they did have problems with planes, big time problems. So, they're going to wait for everything to disperse before they fly in and out of there.
HOLMES: All right. Appreciate the volcano update. We'll come back and get some weather from you.
MARCIANO: Sounds good.
HOLMES: We appreciate you, buddy.
Are we doing weather now? We doing weather now? We're going to talk weather now? Or are we going to move on? No, they didn't let us. We were trying to run the show here and we see what happens.
MARCIANO: Constantly controlled.
HOLMES: They shut that down quickly.
We've got to take a quick break. We'll be right back, folks.
HOLMES: Of course, it's tough dealing with the financial stress here at home, but can you imagine trying to fight your financial battle from the actual battlefield? Almost half of our enlisted troops say they are in debt over their heads and that is why the military has launched a new kind of war.
Here now, CNN's senior international correspondent Nic Robertson.
CHAPLAIN MIKE JONES, 10TH MOUNTAIN DIVISION: You can get $1,000. Isn't that right? We can do that. We went over how we can do that. NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): Chaplain Mike Jones is preaching a different message to his usual sermons.
JONES: The stock market is sucking wind, brother. I mean, it is hurting. It is absolutely hurting.
ROBERTSON: From his chapel at a base just outside Baghdad, he's teaching soldiers a new fight, how to battle the global economic downturn.
JONES: If our fighting force is hobbled financially, then we're not going to be able to fight properly. And if things are not right back home, obviously the soldier's state of mind to be able to accomplish the mission is not going to be as good.
ROBERTSON: Troop commanders are so concerned soldiers learn to manage their money, they gave 80 free places on a commercial course at a cost to the Army of $7,000. Chaplain Jones volunteered to run it.
Sergeant Emily Burlogh (ph) came saddled with debt.
SGT. EMILY BURLOGH (PH), MILITARY FINANCE CLASS PARTICIPANT: I have enough to worry about being over here. My husband is deployed as well.
ROBERTSON: Others are worried about the recession back home.
UNIDENTIFIED FEMALE: The economy is just awful right. And I help my mother out with finances. And my friend, she's gotten laid off.
JONES: Just because we're wearing this uniform does not mean that you'll be in the military forever.
ROBERTSON: Part of Jones' effort, to cut through the complacency that can lull soldiers into believing a military career is insulation enough against the woes of the world.
(on camera): Although officers have been joking about it a little bit tongue in cheek, the financial class has been proving more popular than some of the Sunday services. Almost every seat in the chapel here has been filled.
JONES: I hate to admit it as a chaplain, but that is absolutely the truth. That in times of financial straits, people are going to seek help, you know, in any fashion that they can.
ROBERTSON (voice-over): So important has been the class, when troops graduated, a general came to hand out certificates. When the same course was offered two years ago, barely five percent of the participants passed. This time, it's been 90 percent.
Nic Robertson, CNN, Camp Victory, Iraq.
(END VIDEOTAPE) HOLMES: Well, there's never a boring day, 200 miles above Earth, right? The live picture over my shoulder here, this is from the international space station. Astronauts are going to be taking a third and final space walk of their mission.
They're trying to correct a few issues they had on another space walk. They've got a jammed equipment storage platform up there. A tricky little pin, they might have to actually just hammer out of there. We're going to keep an eye on what's happening there.
HOLMES: Here are some of the big stories that will be coming your way next hour here in the CNN NEWSROOM.
A plane nose dives into a Montana cemetery killing seven children and seven adults. Also, the latest images from Alaska's Mt. Redoubt. Volcanic ash expected to follow the eruption. And President Obama set to lay out his energy plan. We will bring you that live here in the CNN NEWSROOM.
Of course, difficult choices during these tough economic times. Many parents are having to make sacrifices so they can continue to afford private schools for their kids.
Here now, CNN's Susan Roesgen.
SUSAN ROESGEN, CNN GENERAL ASSIGNMENT CORRESPONDENT (voice-over): For most parents, private school tuition has never been cheap. But these days, some parents are struggling more than ever to pay it.
UNIDENTIFIED MALE: Marian Catholic High School tuition.
ROESGEN: Leo and Pam Pochinskas had to make a choice, take their kids out of private school or take out a second mortgage. They took out the second mortgage.
LEO POCHINSKAS, PARENT OF PRIVATE SCHOOL STUDENTS: So I've got to pay it off, it might take me five years or ten years. This is an investment for a real person.
ROESGEN: Leo is a musician, who's had his hours cut in half at a local music store. Pam works in a corporate office that shrunk from five people to two.
PAM POCHINSKAS, PARENT OF PRIVATE SCHOOL STUDENTS: There are nights when I do have -- when I don't sleep. And there's nights when you have the stomachaches, and you would say -- you know, is this all going to turn around? And, you know, am I -- are we going to be a statistic?
ROESGEN: Joey Pochinskas is a freshman at Marian Catholic High School. Emily Pochinskas is a senior. They're combined private school tuition is about $15,000 a year. And the alternative is a lot closer and cheaper.
(on camera): In this case, the public school is just a few blocks away and they wouldn't have to spend thousands of dollars to send their kids here.
(voice-over): But Pochinskas believe their children are getting a better education where they are. A few weeks ago, the principal of the private school had to send 300 students home because their parents hadn't paid the tuition on time.
SISTER CATHLEEN ANNE TAIT, PRINCIPAL, MARION CATHOLIC HIGH SCHOOL: I think there are families who say we just simply can't do that. You can't forego a mortgage payment forever. You know, so there are people that have to make those choices.
ROESGEN: And that's why the Pochinskas will skip eating out, keep clipping coupons and hang on to a 22-year-old car.
EMILY POCHINSKAS, PRIVATE SCHOOL STUDENT: I know that what they're doing for me, like, it's not necessarily the easiest thing because I, you know, my mom comes home, some days I make dinner, and we'll sit down and we'll talk. And, you know, I'll be like how is everything going, mom? She's like, yes, you know, another person was let go today.
ROESGEN: Susan Roesgen, CNN, Chicago.