FDA Continues Investigation of Tainted Milk in China; Investigation Looks at Financial Icons Involved in Financial Crisis
HEIDI COLLINS, CNN ANCHOR: I'm Heidi Collins. You're in the CNN NEWSROOM. Your money -- issue #1. New developments, new concerns this morning. The Fed's launch new investigations into the financial icons at the center of the crisis. And more of your money heads overseas. So what are we getting for it? We'll break it down for you with our money team. I want to begin with Christine Romans this morning in New York. Hi there, Christine?</s>CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Hi there, Heidi. A slim five-point gain for the Dow Jones Industrial Averages.</s>COLLINS: Yes.</s>ROMANS: But you know, we'll take that I think after what we've seen lately in these markets. We're watching today Warren Buffett, the oracle of Omaha, the legendary investor who put a cash infusion of some $5 billion into Goldman Sachs. Remember just a week or two ago we were all watching Goldman Sachs concerned about what was happening with this company, so many people were selling the stock and the stock was tumbling. We were worried about the future of investment banks. Well he has put $5 billion into it. And that's is seen as a vote of confidence in the beleaguered financial services sector indeed. Remember, this is a man who didn't invest in tech stocks during the bubble because he very publicly said listen, I don't understand them. If I don't understand something, I won't buy it. Him buying Goldman Sachs, investing in Goldman Sachs $5 billion is seen by many people as a vote of confidence that someone was buying a big piece of what has been a very beleaguered part of the market -- Heidi.</s>COLLINS: Yes. And what about the FBI launching an investigation? I think it was you who said earlier that we'd probably be more surprised if there wasn't some sort of investigation, right?</s>ROMANS: That's right. We knew there was a subprime investigation that's been going on for months now. Because this is a very big crisis. And the government is looking to see just what kind of laws may have been broken, what was going on there to cause this. And now we're hearing that this investigation also includes some of the companies that have been bailed out by the federal government, Fannie Mae, Freddie Mac, Lehman Brothers, AIG. We don't know an awful lot of details. I don't tend to comment on these sort of things. But we do know that there's a big investigation under way. And as I've said, the surprise would be if there weren't. We're talking about taxpayer money and government intervention into these companies. You know, I would be surprised if the government weren't looking very, very closely at the run-up to this crisis.</s>COLLINS: Well, all right. We will be staying on top of all of it, hopefully, anyway and certainly alongside you. Christine Romans, sure do appreciate that. Also, I want to mention quickly, we just noticed that Fed Chairman Bernanke has walked into the room. And as we've just mentioned earlier he'll be talking before the Senate Joint Economic Committee. There you see alive picture right there of him. We will bring you portions of that. At least we'll be monitoring it and bring it to you should we find it worthy of that. Meanwhile, there's the Dow Jones industrial averages up about 16 points right now. Keep our eye on that as well. The bailout plan back on Capitol Hill, along with the money men who designed it. For the second day, as we said, they are about to face a grilling from lawmakers in both parties. Chuck Schumer there. CNN's Brianna Keilar sets the stage for us.</s>BRIANNA KEILAR, CNN CORRESPONDENT: Dire warnings from the two top money men in America if Congress doesn't come to Wall Street's rescue.</s>BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: I believe if the credit markets are not functioning, that jobs will be lost, the unemployment rate will rise. More houses will be foreclosed upon; GDP will contract that the economy will not just be able to recover in a normal healthy way no matter what other policies are taken.</s>KEILAR: Fed chairman Ben Bernanke and Treasury Secretary Henry Paulson were on Capitol Hill selling their $700 billion bailout. But senators aren't ready to buy it.</s>SEN. JIM BUNNING (R), KENTUCKY: This massive bailout is not a solution. It is a financial socialism and it's un-American.</s>KEILAR: Two GOP members including the banking committee's top Republican condemned the plan.</s>SEN. RICHARD SHELBY (R), BANKING SENATE CMTE. RANKING MEMBER: How do you rationalize or justify bailing out banks and so forth that caused - are the root cause of a lot of this problem?</s>HENRY PAULSON, TREASURY SECRETARY: It may make you angry. It makes me angry. When you ask about the taxpayers being on the hook. Guess what? They're already on the hook. They got put on the hook by the system we have. If this system is not stabilized, they're going to bear the costs.</s>KEILAR: The Democratic chairman of the committee worried about rushing a bill to the president.</s>SEN. CHRISTOPHER DODD (D), BANKING COMMITTEE CHAIRMAN: The Secretary and the administration need to know what they have sent to us is not acceptable. This is not going to work. And they're going to have to come back and work with us.</s>COLLINS: CNN's Brianna Keilar joining me now to talk a little bit about this as we've been mentioning we're in day two of this now. There is a time line that we keep hearing from the Treasury Secretary any way that we have got to do this now and the clock is ticking. What is that time line?</s>KEILAR: Well, as you understand, I'm sure you heard the aim was by the end of the week. There's some discussion about maybe that isn't possible. But I just spoke with a Democratic leadership aide who told me that Congress will not be leaving for its planned recess until they can push some legislation through on this. So maybe not by Friday, Heidi. Maybe perhaps by Saturday, maybe into next week. But we understand they're not going to be leaving without taking care of passing some legislation. Now, the problem, however, is - as Democrats see it, is that there's some lacking Republican support. They can't guarantee a time line on exactly when they're going to pass something. They're urging the Bush administration to get more Republicans on board. Because as the Democrats see it, they say this is a problem created by the Bush administration. This is what Democrats say. And Democrats don't want to be seen as pushing through a proposal for a solution without being joined by Republicans in that.</s>COLLINS: All right, CNN's Brianna Keilar for us on Capitol Hill. Thank you, Brianna. The bailout plan raising concerns on both sides of the political aisle, as you just heard. We're going to be talking with two senators, one a Republican, the other a Democrat. They're coming up right here in the NEWSROOM. President Bush heading home early to work on the bailout plan. The president is in New York this morning and had planned to travel on to Florida. But instead, he will skip a fund-raiser there and return to Washington. Yesterday in an address before the United Nations General Assembly, you saw it here in the NEWSROOM. The president predicted quick passage on the bailout plan. So many lawmakers have voiced concern, that passage does not appear imminent. North Korea now flexing its muscle again. There are new signs that it's making good on threats to restart the nuclear program. The U.N. nuclear watch dog group says at North Korea's request it's removed surveillance equipment and seals from a key nuclear facility. The move clears the way for the country to reactivate the plant. North Korea has told the U.N. agency, it will reintroduce nuclear material in a week or so. North Korea insists its program is peaceful. A national day of mourning in Finland. It follows a deadly shooting at a small town college. Nine students and a teacher were killed by a masked gunman who police say turned the gun on himself. Today we found a community filled with grief, disbelief and fear.</s>UNIDENTIFIED FEMALE: Right now I feel unsafe. I don't want to go to school tonight.</s>UNIDENTIFIED FEMALE: There's guns, shooting people. What? How this could happen in Finland?</s>COLLINS: The day before the shooting Finnish police say they questioned the young man identified as the shooter about some of the videos he posted on YouTube. But they said they had to let him go because he hadn't directly threatened anyone. Cars are backed up for miles on the causeway leading to Galveston. This is the first time now many residents are being allowed back, 11 days after Hurricane Ike slammed into their island city. Even though there's a lot of rebuilding to do, and services aren't fully restored, city leaders say the reopening of the island seems to be going smoothly. That's a good thing to hear. Rob Marciano standing by now in the weather center to talk more about all of the country and what we're looking out for. You got more activity there on the East Coast?</s>ROB MARCIANO, CNN, METEOROLOGIST: Yes. They were just clamoring, folks were just clamoring to get back on the island.</s>COLLINS: Oh, I know. Yes.</s>MARCIANO: To check at least the three sides of the island. The main side where that storm wall was, protected that part pretty well. But the other side just got a lot of water. So it's going to be a nasty cleanup for sure. All right. Folks in Carolina no stranger to hurricanes. This is not a tropical system yet. But it's looking more and more like one. It's been a big red L that's been festering off the coastline for a good couple of days now. It's creating some heavy rains across the Carolina coastline. Now it looks like it's tapping into the Gulf stream, which has waters that are over 80 miles and hour or 80 degrees, and that will tend to feed the tropical system. So it looks like it's taking on some of those characteristics. The National Hurricane Center has just kind of put a red flag on this, saying it could develop into something and already rain bands are beginning to show up on the scope just offshore of the Carolina coastline. So you got that red L, you got this big blue Hs, just feeding some gorgeous weather across the northeast. So that's what's instigating these winds here. So this will hit the Carolinas with storms regardless of what it's classified as. And it shouldn't be much more than a tropical storm, if it is. And probably along the northwest, northwest by the way pretty potent cold front coming your way, cool you down and bring you some rain. Meanwhile, kind of chilly in New York, 71, 67 in Boston. 82 kind of warm and ahead of this cold front across parts of the Midwest and 78 degrees expected in Denver, Colorado. That's the latest from here. Also got a little something that's over the island of Hispaniola. OK. A lot of heavy rain in Puerto Rico. That may develop into something as well. We got a few days to play with on that.</s>COLLINS: Yes. Fingers crossed, it doesn't.</s>MARCIANO: Yes.</s>COLLINS: All right, Rob, thank you.</s>MARCIANO: You got it.</s>COLLINS: Hey, quickly I want to get this out to everybody. We are just now learning -- we have confirmed here at CNN that in fact President Bush is now considering making a primetime speech. It could happen as early as tonight, to put pressure on Congress to approve the $700 billion plan to bail out Wall Street. This is according to a senior administration official, told us here at the network that that is something that the president is considering. Again, possibly speaking tonight during primetime about this $700 billion bailout. We will keep you posted on that. Saving the financial sector, but endangering the taxpayer? The bank bailout plan generating lots of buzz. We pick it up on Capitol Hill.