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Bill Clinton Offers Advice to President Obama; Foreclosure Crisis Overwhelming Court System?

Aired February 20, 2009 - 22:00   ET


ANDERSON COOPER, CNN ANCHOR: Tonight: How safe is your bank, your money?

Breaking news: We just got word about 10 minutes ago of the 14th bank failure of the year. And it is only February, Silver Falls Bank of Oregon -- federal banking authorities arranging for another bank to absorb it.

Markets today down, the Dow industrials at a six-year low, on fears that much bigger banks, Citibank, Bank of America, are in such dire straits, they will have to be nationalized, worries that they are, in essence, dead banks walking, with big names, Democrat and Republican, talking about the government simply taking them over.

Here's Democrat Chris Dodd on Bloomberg news.


SEN. CHRISTOPHER DODD (D), CONNECTICUT: I don't welcome that at all, but I can see how it's possible that may happen. I think that's unfortunate, but it may come to that. I'm concerned that we may end up having to do that, at least for a short time.


COOPER: That was Senator Dodd. By the way, he's chairman of the Senate Banking Committee.

Today, White House spokesman Robert Gibbs said the administration continues to support the privately held banking system, but refused to take nationalization off of the table.

Meantime, President Obama was talking to the nation's mayors about their role in spending stimulus money. He gave them a warning: Spend it wisely, or else.

The "Raw Politics" tonight from Ed Henry.


ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): Who says you can't fight city hall?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If a federal agency proposes a project that will waste that money, I will not hesitate to call them out on it and put a stop to it. I want everybody here to be on notice that, if a local government does the same, I will call them out on it and use the full power of my office and our administration to stop it.

HENRY: While the stimulus law already prohibits spending on projects like golf courses or casinos, President Obama knows there's always potential for fraud.

OBAMA: And that's why we've created, so that every American can go online to see how their money is spent and hold their federal, state and local officials to the highest standards they expect.

HENRY: Many of the mayors shrugged off the warning, saying they already know the American people are watching.

MANNY DIAZ, MAYOR OF MIAMI, FLORIDA: We get called out every day at the local level.



DIAZ: We have plenty of constituents who will be doing that before the president does.

HENRY: Instead, the mayors focused on getting their slice of the $787 billion pie.

GAVIN NEWSOM (D), MAYOR OF SAN FRANCISCO: This is an opportunity of a lifetime. As a mayor, I will never experience this again. And perhaps as a citizen in this country and the next ex-mayor of San Francisco, I don't think I will ever experience it either. So, we don't want to screw it up.

HENRY: Several Republican governors, like Bobby Jindal of Louisiana and Mark Sanford of South Carolina, are vowing to refuse some stimulus funds for their states.

But some Republican mayors who publicly opposed the plan have no problem taking the money, now that it's been signed into law.

PATRICK MCCRORY (R), MAYOR OF CHARLOTTE, NORTH CAROLINA: I'm sending my tax dollars, my income tax dollars, along with my constituents' tax dollars to Washington. And, if I don't spent it, these other mayors will spend it. And that wouldn't be fair to my constituents. So, I do not think it's a sign of a hypocrisy or a contradiction.

HENRY: The president indicated he's willing to share the wealth with Republicans, with a string attached.

OBAMA: I will not compromise or tolerate any shortcuts.

The American people are looking to us, each of you, as well as myself and Joe and others in our administration, for leadership, and it's up to us to reward their faith. HENRY: As his first month on the job comes to a close, Mr. Obama knows right now there's very little margin for error.


COOPER: Ed, it has been a brutal week. What's -- what's going to happen next week, in terms of -- what -- what is the president rolling out next week?

HENRY: Well, Tuesday, he's planning to give his first speech to a joint session of Congress, basically a State of the Union-style speech.

And what's critical about that is not just laying out details -- laying out details of some of his plans, more about the bank bailout, for example -- that rollout didn't go very well last week, as you know. It's going to be the broader them of trying to give the American people some confidence.

The president, in recent weeks, has been using a lot of dire rhetoric, as you know, warning that the crisis could become a catastrophe, a lot of people in both parties wondering about the psychology of the economy and -- and how all of that affects it, even former President Bill Clinton talking about that today.

So, what the president really needs to get done in this speech Tuesday night is to try to give the American people some confidence that the plans he is putting together, beyond just what is on paper, is really going to bring all this together and restore some confidence in the markets -- Anderson.

COOPER: All right, yes, Ed, thanks. Appreciate it.

In a moment, just how is the government spending your money? You just saw all those mayors talking about the money they're going to be getting. This government has promised to be transparent. Tonight, we're "Keeping Them Honest."

First, let's dig deeper on nationalizing banks with CNN's Joe Johns, senior political analyst David Gergen, and personal finance expert Clark Howard, Clark Howard on our sister network HLN.

Clark, breaking news.


COOPER: Breaking news, 14th bank now failure of 2009. Do you think nationalizing the banks is a real possibility in this country?

HOWARD: Not only is it a real possibility. I think it's absolutely the right thing for us to do, especially with the largest banks that are basically zombies now.

If we don't nationalize them, that means the American people are subsidizing enterprises that made bad decisions.

COOPER: What does that -- what does mean, that they're zombies?

HOWARD: They're zombies...

COOPER: I mean, Bank of America, how -- why is that a zombie?

HOWARD: Bank of America, Citibank, most likely, both are zombies.

They have already received massive infusions of cash, more federal guarantees, and it's still unknown how much more debt there is there that is toxic. And, so, they're dead men walking. And you and I are on the hook for it. And, if we're on the hook for it, the stockholders should not be bailed out by you and me, period.

COOPER: David, do we even know what kind of ramifications nationalizing banks in this country would have, I mean, politically, psychologically, economically? Is it -- we're in uncharted water here.


Nationalization has occurred here and it has occurred elsewhere, but in an economy this size, with this complexity of banking, that is uncharted water.

And I must tell you, Anderson, in the last few days, I have had a chance to talk to people in the White House and to leaders in the banking industry. They absolutely are against nationalization. They think it's far better -- we're far better off to try to attract private capital and use government money, a combination, as Tim Geithner began to outline last week, to see if you can -- these banks are undercapitalized now.

Bank of America could survive if you get the toxic assets off the books. So, they would like to see the investment going. And the problem with all this talk about nationalization, Alan Greenspan came out for nationalization this week, Chris Dodd talking about it, the more you talk about nationalization, the more it looms as a possibility, the more private money will flee, because nationalization, in effect -- in effect, wipes out private investors in the banks.

The government takes it over. And the people who own stocks -- that's why the stocks in Citi and Bank of America are so low right now, because of -- in part because this talk of nationalization.


COOPER: For folks who don't know, the stock in Bank of America, I was -- this year, it was at -- the high was $45. I think, today, it was in the $3 range, which is just stunning, David.

GERGEN: It is. It's absolutely stunning.

So, I -- from my point of view, the administration needs to move swiftly with its own plan. It needs to somehow find a way to trump Alan Greenspan -- and I think the trump card may be Paul Volcker -- to come in and help try to put the country under the position of let's try with private capital and government capital.

If that does not work, nationalization may be the last resort, but it's a very, very, very last resort. It's a thing that -- you know, that industry fears the most.

COOPER: And, Joe, politically, the talk of nationalizing banks, as David indicated, is probably the last thing this White House wants to be discussing right now.

JOE JOHNS, CNN SENIOR CORRESPONDENT: Sure. They don't want to discuss it.

But the thing that's so curious here, people talk about the stock market tanking when you talk about nationalization, this has been an open debate for weeks and weeks and weeks around this town between economists, experts and others, who keep going back and forth on this thing.

The other thing that I think is kind of a cogent point, there are people who say, the more money the government injects in capital into these banks in the form of preferred stock, eventually, at some point, it could become common stock. And then what do you have? You have the United States government holding perhaps ownership positions almost in some of these banks. And what's that, but some form of nationalization, you know?

So, this debate is out there.

COOPER: Clark, why should anyone have confidence, though, that the government can run a bank better than the bankers can?

HOWARD: Well, I -- that is a toughie, but the banks have really overleveraged over the years.

They have made ridiculous bets with their stockholders' money. And the consequences of that is that they are upside-down. They are underwater, just like the homeowners. And, so, we have a system in this country to do this. It's the FDIC.

In the late '80s, we had to use the Resolution Trust Corporation. We closed the banks, reopened them the next day as federal entities. We took the bad stuff off the books, put them into what is now called a bad bank, the RTC. The RTC rehabilitated the assets, sold them off.

The customers of these banks were served just as they had been before. And I think that is the right, orderly process, because, otherwise, you have a political football, where we bail out stockholders. And that's not what America's about. If you own stock in a company that makes bad decisions, you get wiped out.

COOPER: We're going to have more with our panel coming up.

Let us know what you think at home. Should -- what do you think should be done about the banks? Should some of them be nationalized? Join me in the live chat happening right now at

Also, check out Erica Hill's live Webcasts during our commercial breaks.

Also, send in your questions for Clark Howard -- you just saw him -- and "Money" magazine's Donna Rosato. They're going to up later on in the program talking about housing and banks and your 401(k)s, whatever questions you may have.

Up next: President Obama promising major accountability when it comes to spending your money. He said that to the mayors today, inspectors, a Web site, and more. We have discovered a catch, though, that could cost us billions. Joe Johns tonight is "Keeping Them Honest."

Also, the anger over bailing out homeowners -- a former broker's cable rant on how it punishes people who play by the rules, the sharp White House response today, and the arguments for and against bailing out people, even if they made bad choices.

And, later, how the recession is leading to great depression in the bedroom, the grim new...


UNIDENTIFIED MALE: Too much stress, too much worry, too much anxiety equals zero sex.


COOPER: How sex lives are suffering along with everything else -- tonight on 360.



OBAMA: The American people are watching. They need this plan to work. They expect to see the money that they have earned, that they have worked so hard to earn spent in its intended purposes, without waste, without inefficiency, without fraud.


COOPER: President Obama today.

With the $787 billion in stimulus money trying to work its way around the country, hundreds of billions going to banks, tens of billions going to Detroit, he is promising transparency like we have never seen before.

We found some people on the streets of Washington, however, who are pretty skeptical about it. Take a look.


UNIDENTIFIED MALE: I'm sure a good amount of it is going to be lost or will be difficult to track.

UNIDENTIFIED MALE: I'm not really sure about how it's go to work and whether it's going to be effective. So, to be honest, I'm just sort of, you know, confounded by the whole thing.


COOPER: Not exactly a wellspring of trust.

You can let us know what you think on the live chat happening now at

The question is, how well-monitored is this money going to be?

Joe Johns tonight is "Keeping Them Honest." And he's already found good news and bad.


JOHNS (voice-over): First, the good news: The accountability the administration promised is literally coming online. The new Web site to track stimulus spending,, is now up and running.

The stimulus also included some $350 million for spending oversight, about two-thirds of it for inspectors general at government departments. The auditors at the Government Accountability Office got extra money, too.

(on camera): Now the bad news: Even after all that and the recent crackdown on congressional earmarking, there still may be an enormous hole in the accountability safety net.

(voice-over): Billions and billions of dollars in the stimulus bill are not directed to specific projects, just to departments and agencies. And that could set off a gold rush.

The watchdogs call it phone-marking, members of Congress in their offices using the phone and other forms of electronic communication, like e-mails, PDF files, faxes, even instant-messaging, to accomplish exactly what earmarks once did, getting hold of your money for pet projects, and you may only find out just who got hold of it and what for after it's spent.

STEVE ELLIS, VICE PRESIDENT OF PROGRAMS, TAXPAYERS FOR COMMON SENSE: Phone-marking is really something that just exists in the shadows. Essentially, it is where a lawmaker is calling up a federal agency. Nobody knows that it's going on. Nobody's able to track it. It's trying to exert pressure on federal agencies to actually spend the money where that lawmaker wants, rather than what is in the nation's best interests.

JOHNS: So, how does it work? After a big spending bill, like the stimulus, gets passed, members of Congress start making calls and firing off letters to get some of the money directed at their favorite project. Phone-marking is not exactly new. Consumer advocates Taxpayers For Common Sense supplied us with several letters fired off after passage of a spending bill two years ago in which members of Congress pushed federal agencies to spend money on rural water projects, a national historic site in Kansas, employee training centers.

Now, with the stimulus loaded down with money for federal agencies to spend, the watchdogs fear, there will be an explosion of phone-marking. Take the Army Corps of Engineers.

ELLIS: Normally, their budget is hundreds of projects written by Congress and the administration. They got essentially one year's worth of funding, $4.6 billion. There isn't a single project written in there. And you better believe that lawmakers are going to be calling the Corps, saying, hey, you need to build this dam.


COOPER: So, Joe, let me just get this straight. This money's going to be spent, and after -- it's only after it's spent that we're going to kind of know how it's been spent; there's no kind of forewarning?

JOHNS: Yes, that's the real problem right now.

You talk to somebody like the former comptroller general of the United States, who used to run the GAO. He says, there should have been some front-loading on the accountability. But it's all back- loaded, so that, once you find out how it was spent, then you decide whether it was spent correctly.

That perhaps is a systemic problem -- Anderson.

COOPER: Yes, it certainly seems to be.

Joe, thanks.

Up next: Former President Bill Clinton, he is speaking out today on what he thinks Obama should be saying. Is Mr. Obama being too pessimistic in public? Should he change his tone? Find out what Mr. Clinton says in a moment.

Plus, a stunning revelation -- what investigators say Bernie Madoff did with investors' money, perhaps more importantly, what he didn't do. They were looking for the stocks and bonds he bought for clients. What they found is almost beyond belief. We will tell you about that ahead.

And, later, the recession hits the bedroom.


UNIDENTIFIED MALE: Since I have no money to spend, sex has been, like, increasing, because what could you -- what else could you do?

(END VIDEO CLIP) COOPER: It turns out he's the exception. A new report is out on the impact of the financial crisis, the impact it's having on sex lives. We will haven't surprising results -- coming up on 360.



OBAMA: We know that, if we do not act, a bad situation will become dramatically worse. Crisis could turn into catastrophe for families and businesses across the country.

So, the road ahead is not an easy one.

And economists across the spectrum have warned, if we don't act immediately, then millions more jobs will disappear, the national unemployment rates will approach double digits.

More people will lose their homes and their health care, and our nation will sink into a crisis that, at some point, we may be unable to reverse.


COOPER: Some of the recent comments by President Obama. He promised to tell us what we need to hear, not just what we want to hear. And his supporters say that's exactly what he's been doing.

The question tonight, though, how much is too much? Can telling too much truth about the economic situation actually make things worse?

It was not us who was asking today. It's former President Clinton.

More from David Mattingly.


OBAMA: Thank you, everybody. Thank you.


DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): Just a month into office, and President Obama doesn't sugarcoat anything when selling his economic plan.

OBAMA: Crisis could turn into catastrophe.

More people will lose their homes and their health care.

So, the road ahead is not an easy one.

MATTINGLY: Sure, things are bad, and straight talk is good. But, when you're president, is there such a thing as too much mope and not enough hope? BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I'll tell you what I would like.

MATTINGLY: Even former President Bill Clinton says, it might be time to lighten up a little.

CLINTON: I just would like him to end by saying that he is hopeful and completely convinced we're going to come through this.

MATTINGLY: But that may be easier said than done, when so many people are personally feeling the economy's bite.

GEOFFREY GARIN, PRESIDENT, HART RESEARCH ASSOCIATES: So, they don't want the -- the president whistling past the graveyard. What they want is somebody who says, look, we're -- we're in a pretty deep hole. It's going to take us a while to get out of it. But we have a path to get there, and, if you stick with it, we will make it.

MATTINGLY (on camera): So far, Americans seem to be paying attention. The latest CNN poll shows, 80 percent say Obama is a strong leader. That's up 4 percent from before he talk office. Seventy-five say he inspires confidence, also a great number, but that's down seven points from December.

And critics say a more serious measure of Obama's tone is in the sinking markets. An editorial in "Investor's Business Daily" says, "The problem is, if you talk down the economy, you get a down economy, and stocks down, too."

(voice-over): Still, some say, if the president sounds too upbeat about something that's already darkened the economic prospects of millions of voters, he runs the risk of sounding out of touch.

GARIN: You can't just talk people out of bad times by being optimistic or being positive. People know that -- that this is a very tough moment in America.

MATTINGLY: And Obama is not letting up. His latest remark ended the workweek as the president spoke to the nation's mayors.

OBAMA: We have asked for the unprecedented trust of the American people to deal boldly with the greatest economic crisis we've seen in decades.

MATTINGLY: Now Obama chooses to speak boldly about the challenges, possibly saving more optimistic messages for when more people are keeping their homes and their jobs.

David Mattingly, CNN, Atlanta.


COOPER: Let's dig deeper on this with our panel, Joe Johns, Clark Howard, and David Gergen.

David, should President Obama lower the gloom-and-doom talk? GERGEN: Anderson, two of our most successful presidents of the 21st century were Franklin Roosevelt and Ronald Reagan. And both of them had a contagious optimism about the future.

They didn't -- they didn't gloss over the problems of the present. They were always willing to face up to just how tough things were, but they had a sense that we were heading in the right direction; we would ultimately prevail.

And I think what President Clinton has advised, I think, is right. And that is, having now warned us of the catastrophe -- and everybody knows that that is out there as a possibility -- having passed a stimulus bill, this is the time to do a pivot toward looking toward the prospects of the road out, the road up, because -- because, after all, at the end of the day, much of what we're facing is about psychology. It's about public psychology and about confidence in the future.

COOPER: Clark, it's a good point. I mean, can the president's rhetoric and tone impact the economy? Is it a self-fulfilling prophecy in a way?

HOWARD: In the short-term.

And reality is, we have fundamentals that are out-of-kilter. We have to work off the excesses of us having borrowed too much money. All of us, really, bought too many things, too big a houses, too many cars. Businesses took on too much debt. And that excess has to be worked off.

What I wish I was hearing from President Obama was about the vitality of American capitalism and the vitality of individual entrepreneurs, and how every time we have gone into a ditch with the American economy, it has been the individual spirit of entrepreneurs that has brought us out.

And I think that's part of the optimism you were talking about, David, about what Ronald Reagan talked about is what we as individuals can do for our country.

COOPER: Joe, there's this new CNN poll out that shows 92 percent of Democrats approve of the job the president's doing, which is down, I think, from -- about four points from early last week.

If you look at Republicans, though, they only give the president a 31 percent approval rating, down from 50 percent. What does that tell you?

JOHNS: Well, there's certainly a drop there. And it's very evident, isn't it?

Probably that drop came along the time they were working out the stimulus bill, at least on the Republican side, and Republicans were very unhappy with the president, because he seemed to be courting their vote, but not listening to what they were saying and actually trying to put it into a bill. But the other half of it, Anderson, quite frankly, is, this country is still kind of polarized. You have states, conservative states, that just don't agree fundamentally with some of the things this president is into, particularly when it comes to taxing and spending, very concerned about how much this government is spending right now.

And that is a very deep, fundamental disagreement. So, there's always been some polarization.

COOPER: We're going to have to leave it there.

Joe Johns, David Gergen, good to have you. Good weekend.

Clark Howard, stick around.


COOPER: We're going to talk with Donna Rosato, as well, senior writer at "Money" magazine.

They're going to be taking your e-mail questions on the housing crisis, 401(k)s, nationalizing the banks.

Send them those questions at

Just ahead, what happens when your home gets foreclosed on? We're going to take you with inside the court. Meet a judge working at warp speed. He is signing off on as many as 1,000 foreclosures per day.

Also ahead, we know the economic mess is depressing, but what effect is it having on your sex life? A new study has some surprising answers.

And a pep talk from first lady Michelle Obama, her charm offensive continuing in Washington -- what she said as she solidifies her new role in her own words.


COOPER: The picture you're looking at just won the World Press Photo of the Year Award. It was taken by "TIME" photographer Anthony Suau.

It's not what you might think. This is an armed officer. He's not on a drug bust or a domestic violence call. He's following procedure after an eviction in a Cleveland house due to a mortgage foreclosure, a grim new image of the times.

Every day, it seems, we are hear about more people losing their homes. Millions are in danger of becoming the next -- next statistics.

In "Uncovering America" tonight, we want to take you behind the numbers to a part of Florida where the mortgage crisis is literally overwhelming the court system.

Here's Gary Tuchman.


UNIDENTIFIED MALE: Signed. Ten more to go.

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): It's a court that operates in fast-forward, so fast, the docket has become known as the rocket docket, handling up to 1,000 cases a day. It's the rapid conclusion to an agonizing foreclosure process.

CASEY MCNEER, HOMEOWNER: My husband passed away.

UNIDENTIFIED MALE: Well, I'm sorry to hear that.

MCNEER: And the debt just kept getting higher and higher.

TUCHMAN: Casey McNeer just lost her home.

MCNEER: They told me my best option was to refinance. But they wouldn't do it.

TUCHMAN: The judge asks his final questions.

UNIDENTIFIED MALE: So, you acknowledge you're behind on the payments...


UNIDENTIFIED MALE: ... you're not in the home, and it needs to go into foreclosure?


TUCHMAN: And then the judge's order.

UNIDENTIFIED MALE: Then, it's my job to -- an unhappy one, but my job to enter the final judgment of foreclosure.

MCNEER: I understand.

TUCHMAN: This is Fort Myers, Florida, also known as foreclosure Myers, one of the highest foreclosure rates in the country. Home values have plummeted by as much as 50 percent since the height of the market in 2005. Unemployment has reached 10 percent, leaving houses overgrown, abandoned, up for auction. "For sale" signs and lockboxes are everywhere.

UNIDENTIFIED MALE: I can't believe it, that I'm 60 years old and losing my home today.

TUCHMAN: Foreclosures in Florida sometimes take a year and require a judge's approval. Here, that's usually just a quick once- over and signature. Nowhere is it quicker than in this courthouse, where judges presides over the rocket docket. JUDGE HUGH STARNES, LEE COUNTY CIRCUIT COURT: Do you have any questions?

TUCHMAN: Hugh Starnes is a retired judge, brought back to help move the backlog of 30,000 cases, often dispensing with them, literally, in seconds.

STARNES: It is a legal, procedural response to an overwhelming number of filings that, unfortunately, is necessary.

TUCHMAN: But this day's news wasn't all bad for everyone. Patricia Valverde, a laid-off mortgage broker, thought she was about to be foreclosed. But her bank gave her some more time. She says she hopes Barack Obama's housing plan succeeds.

PATRICIA VALVERDE, HOMEOWNER: I'm still happy with his ideas and, you know, everything, I think everything is going to change with him.

TUCHMAN: Most cases in Fort Myers involve homeowners who were speculators. They're out-of-towners. They don't bother showing up. But for the other 40 percent, this lightning-quick court action marks a surreal change in their lives. They have been part of the rocket docket.

Gary Tuchman, CNN, Midlands (ph).


COOPER: A very real look at what is happening out there.

Up next, buyer beware: the fine print on the housing bailout. The facts, the anger, ahead. Also answering your questions on the economy.

Also tonight, just when you thought you heard everything about Bernie Madoff, the new shocker about the alleged $50 billion scam.

And also this.


UNIDENTIFIED FEMALE: It definitely helps us think about having -- not having more sex. We're surfers (ph), and we live in New York City, and the cost of raising a kid is kind of out of this world.


COOPER: The financial crisis and family planning. People are not having more kids, and they're having less sex, too. A new report out when 360 continues


Another possible sign of the times: all the bad economic news could be hurting your sex life. We'll have more on that coming up. But first, Erica Hill joins us with a "360 News and Business Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, a United Nations report finds Iran has amassed enough uranium to make an atom bomb. But that report also says Iran would have to significantly upgrade its enrichment facilities to turn the uranium into weapons-grade material.

Illinois Governor Pat Quinn today joining the chorus calling for Senator Roland Burris to resign. Burris is under pressure for not disclosing contact to advisors to former Governor Rod Blagojevich, who of course, appointed Burris to that Senate seat before he was forced out of office. An aide says Burris has no plans to step down.

New pictures showing alleged con man Bernard Madoff at his computer in his Park Avenue penthouse. There they are. He is under house arrest, of course, charged with operating possibly the largest Ponzi scheme in history, some $50 billion.

And today, investigators said there is not a scrap of evidence that Madoff bought a single share of stock for his clients for at least 13 years.

First lady Michelle Obama making a stop on her tour of government agencies today, telling employees at the Transportation Department. They touched the lives of every American.


MICHELLE OBAMA, FIRST LADY: I say this everywhere I go and every agency I've visited and every agency that I will visit: our leaders are only as strong as those who hold them up, all of you. So that's why I'm here.


HILL: And some sad news to report to you tonight. Former first cat Socks has died. Socks came to the White House with the Clintons, apparently a stray that Chelsea Clinton found. When they left Washington, Socks moved in with the former president's personal secretary, Betty Currie. He was just shy of 20, and reportedly had cancer. Poor guy.

COOPER: That's bad news.

I cannot believe, the Bernie Madoff thing is incredible. Not only those pictures of him at his computer, but the fact that...

HILL: No investments.

COOPER: No investments for 13 years. I mean, so essentially, if that is, in fact, true, all those statements he was sending out were just complete fabrication.

HILL: It's amazing. I have to say, when I first saw it today, I had to reread it a couple of times for it to really sink in. COOPER: Bizarre.

All right, Erica. Thanks.

Next on 360, the mortgage madness and you. Tens of billions to bailout homeowners. But is the deal rescuing those who got us into this mess? We're going to take a closer look at what's in the plan and what is at stake.

We're also taking your questions on all things money related. Here to answer them, two financial gurus: HLN's Clark Howard and Donna Rosato with "Money" magazine.

Also, a new report out about the economic woes and your sex life. How bad is one affecting the other? Find out, ahead.


COOPER: Signs of the times. Foreclosure spreading at a record rate. The president says his housing bailout plan is going to stop the suffering, but at what price? On the low end, we're hearing $175 billion, but estimates run as high as 275 billion.

The gamble, expensive, divisive, no doubt about that. A lot of Americans saying it rewards those who overreached, buying homes they couldn't afford, taking mortgages they couldn't make. Others believe property owners who never missed a payment will benefit.

A lot of uncertainty and anger out there. It is your money, your future we're talking about. Tom Foreman reports.


TOM FOREMAN, CNN CORRESPONDENT: The housing bailout is welcome news in some places but not in others. Like this Orlando neighborhood where some taxpayers see raw politics more than sound policy.

BRUCE TIMBERLINE, HOMEOWNER: I think it's a classic constituency move that the Democrats are so good at, where they basically put people on the dole. That is they slurp at the public trough and they end up voting Democrat.

FOREMAN: On the Internet, blog sites are burning: "It's insane," "Where is fair?", "Why on Earth should anyone that lived within their means be forced to pay for someone who took on excessive risk?"

And on TV, a CNBC reporter's rant.

RICK SANTELLI, CNBC BUSINESS NEWS: This is America. How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills? Raise their hand.




SANTELLI: How about we all -- President Obama, are you listening?

FOREMAN: At the White House, press secretary Robert Gibbs was listening.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I would encourage him to read the president's plan. And understand that it will help millions of people, many of whom he knows.

FOREMAN: Many who oppose the bill, however, seem to understand it fine. They just think it's wrong.

(on camera) Opponents argue this plan simply has no clear way to determine if a troubled homeowner added to his mortgage problems by spending too much money on other things, for example, sending his kids to private school or buying expensive cars or taking lavish vacations.

(voice-over) In announcing the plan, the president took pains to say that money will not go to people who made bad decisions, or bought too much house.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: But I want to be very clear about what this plan will not do. It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans.

FOREMAN: But today, his press secretary said...

GIBBS: There will be people that made bad decisions that, in some way, also get help.

FOREMAN: Still, supporters remain firm.

SHEILA BAIR, FDIC CHAIRWOMAN: We are all in this together. This is a housing-led recession. The relentless burrow (ph) of home price declines caused by unnecessary foreclosures is hurting everyone.

FOREMAN: In other words, everyone is in the same leaky boat, and like it or not, they say this plan is the only bucket for bailing.

Tom Foreman, CNN, Washington.


COOPER: Well tonight, we're taking your questions on the economy. And a lot of you posting comments on our blog at We've received some iReports, as well. We're letting you ask the experts about keeping your job, home, savings, sanity. Talking about the housing mess.

Joining me now is Donna Rosato, senior writer at "Money" magazine, and back with us again, Clark Howard, consumer reporter and host of HLN's "Clark Howard Show." All right. Let's get to some of the e-mails we've been getting. A lot of talk on our blog about Obama's housing plan. Let's listen to one thing in particular that the president said when he announced the plan. Take a look.


OBAMA: It will not reward folks who bought homes they knew from the beginning they would never be able to afford.


COOPER: Clark, our viewer Tom writes, thought, quote, "I'm at a loss on this bailout plan. My taxes are going to pay the refinancing costs for my neighbors who borrowed irresponsibly, so my question: when is the bailout going to help people who have been doing the right thing all along?"

Clark, what do you think?

CLARK HOWARD, HEADLINE NEWS ANCHOR: Well, you know, there's so much anger in the country about that. But the bailout is actually three parts. And I can't believe I'm going to defend part of any bailout. But one part of it allows people who are in loans that they're not in over their heads, then. They owe a little more than what the home is worth. They're paying on their mortgage as agreed. All that program does -- and it's the smallest of all this -- allows them to refinance their mortgage.

It's the other parts that, as people learn more about them, they're going to go bonkers about. Such as allowing bankruptcy court judges to just, with the pen wipe out a big portion of people's balances, and say, "Oh, it's OK, you took on more house than you could afford. Now we're going to make it affordable for you."

And the other part of the bailout does that same kind of thing without a bankruptcy court judge, and that's where you're hearing so much seething anger from people: "If I'm paying my mortgage, why am I bailing out somebody else who couldn't or didn't?"

COOPER: Donna, Mark, another viewer lost his home to foreclosure back in December. And he wrote, "Will there be any options for those of us who missed the boat on the mortgage bailout?" So, you know, are people like Mark just out of luck?

DONNA ROSATO, SENIOR WRITER, "MONEY": Well, Obama's plan really is for people who haven't gone into foreclosure yet. So if he's still in his house, then he hasn't actually been evicted, he may find some relief.

A big part of the Obama plan is to encourage lenders to work with people who have already fallen behind. There's a number of banks, Wells Fargo, for example, that have declared a moratorium on foreclosure proceedings.

So it depends kind of where he is in the process. And as Clark said, there's also the option of, if he goes into bankruptcy, bankruptcy judges are being -- may have the power to renegotiate mortgages.

But bottom line is the Obama program was aimed at people who haven't gone into foreclosure yet. I would recommend that he contact his lender and, if he can't get through, talk to a HUD counselor and get some good advice from them about what he can do.

COOPER: All right. Another e-mail: David Kennedy wrote to us asking, "Is there a practical -- is there a practical five-step solution for those of us who have lost our jobs and are not expecting or wanting a government handout? Where do we start so we can help ourselves?" Clark, any advice?

HOWARD: Well, the first thing: what's a government handout and what's not? It is absolutely legit for you to take unemployment compensation. That is there, not as welfare, but as a legitimate employee benefit.

No. 2, if you are having trouble putting food on the table, 32 million Americans are receiving Food Stamps. It is perfectly OK, and that's what the program is there for, for down economic cycles for you to take Food Stamps.

Three, you triage your money. You set up what's a priority and what's not. Now, the one organization you have to let sit and wait are your credit-card companies. If you're short of cash, you've lost your job, the credit-card companies have to wait until you're back on your feet.

I don't have a fifth step.

COOPER: Well, we'll work on that. Donna, we got this iReport from John Stephens in Connecticut. He's fighting foreclosure on his own. He says his lender, Citi Mortgage, recently announced that they were freezing foreclosures. But after the president announced his housing rescue plan, this guy says that his lender abruptly switched gears. Let's listen to the iReport.


UNIDENTIFIED MALE: So now what's Citi Mortgage doing? They're going to try to get as many people out of their houses as possible before he can do anything and before anything takes effect, which I believe is March 2. This is totally ridiculous.


COOPER: Donna, what do you make of this? Do you really think banks are going to try to force through as many foreclosures as they can before the president's housing plan takes effect?

ROSATO: Well, this would not be an unprecedented move. I don't know what Citi is doing specifically. But I do know that, for example, I follow the credit-card industry pretty closely. And the Federal Reserve came out with some really tough regulations cracking down on some credit-card abuses in December. And those don't go into effect until next year.

And what we're seeing is a lot of people -- a lot of people are seeing their credit-card rates and fees going up. And a lot of people say this, because banks are trying to get ahead of the deregulation. So don't again, know specifically what Citi is doing, but it would not be unheard of for something like this to be happening.

COOPER: Wow. Clark, it looks like you may want to weigh in on that.

HOWARD: Well, you know, with the credit-card companies, one key protection you have, most of the letters people are getting, raising their interest rates, changing the terms, if you agree to close your account, you in most cases are allowed to pay off your account under the old terms.

And most people who were facing, let's say -- like I had a caller the other day who was going to 30 percent interest from 11.9 in one of the letters from the bank. They would be better off agreeing to 11.9 and giving up the privilege of that card in the future.

COOPER: Thirty percent interest. Unbelievable.

Clark Howard, Donna Rosato, appreciate it. Thanks for the advice.

HOWARD: Thank you.

ROSATO: Thanks very much.

COOPER: A reminder how -- how the crisis could be affecting your sex life and what you can do about it. A new report is out.

And stay with us. The "CNN Money Summit" begins at the top of the hour. I'll be joined by Ali Velshi and others, digging deeper into the financial mess. Information you need to know, when 360 continues.


COOPER: Signing the stimulus package into law, President Obama counting on the rescue plan to save the economy. The financial tsunami continues to have far-reaching consequences, from the board room to the bedroom, with more Americans apparently saying they are having less sex. Erica Hill reports.


HILL (voice-over): In today's New York, the sequel might be called "Sexless and the City." Imagine Terri out of a job, Mr. Big out of cash...

SARAH JESSICA PARKER, ACTRESS: And their sex life just plain on the outs.

UNIDENTIFIED MALE: Too much stress, too much worry, too much anxiety equals zero sex.

HILL: In a recession, romance can disappear faster than your 401(k).

LAURA BERMAN, SEX THERAPIST: When you're struggling with stress, that's always going to take its toll on your relationship and your sex life. Now you're not only dealing with stress, but you're also dealing with financial worries, which is a huge libido killer, in particular for men, but for women, as well.

HILL: Translation: stress is bad for your sex life.

A recent poll from the news and opinion Web site The Daily Beat found 30 percent of those surveyed are less interested in having sex during a financial downturn.

Dating is also slipping, and families may not be growing. Forty- two percent said they're less likely to have a child because of the economic collapse.

UNIDENTIFIED MALE: Again, we're having a second in uncertain times. It's a little terrifying.

HILL: The uncertainty can also lead to more stress and fights.

BERMAN: What happens when you're struggling with money is that you begin to feel very unsafe, emotionally and literally. It leads to lots of issues of conflict. And so it's very easy for couples to be kind of torn apart during this time.

HILL: But wait: there's also the other extreme. Interestingly, as couples are shying away from sex, the business of sex might actually be thriving in this economy. One therapist recently told CNN one of his Wall Street clients are paying for sex more often even as their incomes plummet.

JONATHAN ALPERT, PSYCHOTHERAPIST: Some people may drink to cope with stress. Others may use drugs. These people are using sex as a way to distract themselves or numb up some of the feelings of anxiety.

HILL: If you're a little anxious about the downturn's effect on your relationship, there is one simple solution.

BERMAN: Really just hang out together. Listen to some music, play a game, have a glass of wine, but really spend that quality time together where you can escape, even if it's just for 15 minutes, a couple of days a week from the reality that's bearing down on most of us.

HILL: Most of us, but not all.

UNIDENTIFIED MALE: Since I have no money, sex has been like increasing. Because what could you -- what else could you do?



HILL: Barry, bringing it home right there.

Two other interesting points I wanted to point out from -- from that survey, a survey of about 900 people. The number of people who believe sex for money is immoral: 60 percent. So that should give you a little bit of faith.

And they also asked questions about people making more money, whether or not they should have certain things. And when it came to a better marriage or more marriages, should people with more money have a better one? Fifty-five percent of the respondents said no, only 20 percent said yes, that money necessarily made your marriage better.

So maybe that's sort of a little silver lining here.

COOPER: All right, Erica, thanks.

Still ahead tonight, tonight's "Shot." His dad videotaped him after a trip to the dentist. The video got 10 million hits on YouTube.




COOPER: Dad got some backlash, apparently. Now his son is talking again. Does he feel exploited? Is he embarrassed? Hear it for yourself, just ahead.

Also, a 360 CNN special, "CNN Money Summit." Ali Velshi and other financial gurus, cutting through the president's plan and explaining what it all means for your finances, ahead.


COOPER: Erica, tonight's "Shot" is a 360 follow. We all remember the YouTube video of David, a cute kid who was a little loopy after a trip to the dentist. Still kind of doped up. Take a look at the original video.


DEVORE JR.: I can't see anything.


Stay in your seat.

DEVORE JR.: (SCREAMING) Daddy, I don't feel tired.

DEVORE SR.: You don't?




COOPER: David's dad made the video. It's gotten more than 10 million hits on YouTube. It's also had some people asking if it's just harmless fun or if it's humiliating for David. Apparently, David and his dad went on the record with it all with HLN's "News to Me." Take a look.


DEVORE JR.: I feel famous. It feels cool. It feels awesome. I feel like a rock star.

DEVORE SR.: I'd say 99 percent have been just very positive and thought it was funny. Look at David. He's in a car. It's not moving. He is seat-belted in, even though the car is not moving.


HILL: Pretty cute.

COOPER: So the kid feels, he like a rock star. There you go.

HILL: I think we should send him a "Beat 360" T-shirt.

COOPER: Sure, why not. Do we make them that small?

HILL: Maybe not. But you know, we can make him a special -- we'll just cut it.

COOPER: We'll cut it. All right. We'll try.

All right. Erica, have a great weekend.

Coming up at the top of the hour, the "CNN Money Summit," a 360 special. Some of the sharpest minds in the business on the president's plans and what it means for you. Stay tuned.