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Global Markets Reeling; Yemen's President Returns; Perry, Romney Clash at GOP Debate; Abbas to Address General Assembly; Ahmadinejad Speech Triggers Walkout; Tensions Rising Between U.S. and Pakistan; Partial Government Shutdown Looming; NASA Satellite Falling to Earth; Markets in Chaos; The New Face of Poverty; State TV; Yemen's President Returns; Solyndra Execs Invoking 5th Amendment; Faster Than The Speed of Light?

Aired September 23, 2011 - 06:00   ET


ALINA CHO, CNN ANCHOR: Let's start your day with urban warfare breaking out in the capital, his country spiraling towards civil war and al Qaeda plotting within its borders. Yemen's president suddenly returns to a bloody mess.

CHRISTINE ROMANS, CNN ANCHOR: I'm Christine Romans. Who won? Who lost? Who surprised? GOP candidates square off in Florida to try to stop it from becoming a two-man race, on this AMERICAN MORNING.

CHO: Good morning.

ROMANS: Good morning.

CHO: We haven't spent much time together this morning. It's Friday. Friday, September 23rd. Welcome to AMERICAN MORNING. Friday's always a good day. Ali and Carol have the morning off.

ROMANS: All right, up first, the markets buckling and 401(k)s crumbling. Fears of another global financial meltdown spurring a frenzy worldwide. You saw it yesterday and Asian markets down sharply again overnight after another brutal day for the Dow.

Two brutal days in a row for the Dow. The worst two days since 2008. Let's get the latest from Nina Dos Santos live this morning from London, and at least stock futures this morning are stable, Nina. It's not showing an extension of all of that terrible selling in the last couple of days. What's happening?

NINA DOS SANTOS, CNN CORRESPONDENT: For the moment, it's not, Christine. But I can tell you that the European markets although they were up an excessive 1 percent about now or so ago are quickly shedding some of those gains as we speak.

When we move on to Asia, the markets overnight as you quite rightfully said in your introduction showed the Asian markets losing quite a bit overnight. Some of those markets hitting lows we hadn't seen, in fact, since last year or even the year before that.

Nikkei though should point out end of the day up to the tune of about a quarter of 1 percent. The stock market, same here in Europe, at one point flirting with losses earlier on in today's session though firmly in the green for the moment.

We'll, of course, have to see how the United States' market get trading in a few hours from now, sort of dictate the trend here as we heading towards the end of the week, Christine.

But one of the reasons why everybody's so worried and on the other hand perhaps elated, is that on a positive note, we had the G-20 finance ministers meeting in Washington saying that they were going to act to try and solve the global economic crisis.

But on the other hand, economists saying that there seems to be a growing debt between what economists and the market say the solution should be and what politicians can realistically deliver.

I was also saying that there was negative news, the IMF downgraded earlier on in the week and the fed warned of downside risks to the U.S. economy. That's what we have to look forward to going into the weekend.

ROMANS: Worrying about the banking sector, worrying about just how slowly the world economy is growing, and all of these things. Nothing really to turn that around quite yet. Nina Dos Santos, thank you so much, Nina.

CHO: He's back. Yemen now says President Ali Abdullah Saleh has returned. Now Saleh has spent nearly three months in Saudi Arabia after being badly injured in an attack on his palace.

His capital city gripped and fighting in shelling the past week that reportedly left dozens more dead over frustration that he won't step down. Mohammed Jamjoom has more from Oman this morning. Mohammed, good morning to you.

MOHAMMED JAMJOOM, CNN INTERNATIONAL CORRESPONDENT: Good morning, Alina, and we're seeing live pictures now on Yemeni state television of tens of thousands of Saleh supporters in central Sanaa. We've had reports today that are tanks rolling through the streets and there's celebratory gunfire.

Members of different army factions that are shooting into the air celebrating the news of the arrival of President Ali Abdullah Saleh, but also we're getting word from activists and opposition politicians over there that they are dismayed and extremely worried at what this means.

Many activists telling me that they didn't think Saleh would return. They were concerned that he might try to install his son in power. But Yemen is a country that's been ridden with anti- government protest movement for the past seven months, hundreds of thousands of Yemenis across the country day after day pouring out into the streets of various cities.

Even when their lives have been in danger and they've come under fire from government forces and other army units. Basically sending out the message they want that president gone. Once he left the country to recuperate in Saudi Arabia after an assassination attempt, many thought he would not return.

The news that he has returned today comes as a shock to many. Many even in government circles especially to the protesters, they're saying it's a very tense situation.

If I can remind our viewers, in the past week even though there was a U.N. and a GCC envoy in the capital there to try to iron out a power transfer deal, there were still dozens of people killed in clashes that happened in several cities.

Hundreds wounded. So a very chaotic scene in Yemen in several cities and people think it's very tense today and it could get even more tense as the day progresses. Alina --

CHO: Mohammed Jamjoom live for us in Oman this morning with the update. Mohammed, thank you.

ROMANS: All right, they were taking swipes at the president. They were going back and forth at each other and about going back and forth on the issues. It was another testy GOP debate last night. Jim Acosta, he's got the highlights.



JIM ACOSTA, CNN POLITICAL CORRESPONDENT (voice-over): It may have felt like bad bin to Rick Perry, but for the Texas governor, it was almost a game of one against eight.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: It's an argument I just can't follow.

ACOSTA: On the Perry-backed Texas law that offers in-state tuition to the children of illegal immigrants, it was Romney with the setup.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: That doesn't make sense to me, and that kind of magnet -- that kind of magnet draws people into this country.

ACOSTA: And Rick Santorum with the overhead smash.

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: And why should they be given preferential treatment as an illegal in this country? That's what they're saying. So, yes, I would say -- I would say that -- I would say that he is soft on illegal immigration.

PERRY: I don't think you have a heart.

ACOSTA: The GOP front-runner's defense of the law drew cheers, but also boos from the crowd.

PERRY: This was a state issue. Texans voted on it and I still support it greatly.

UNIDENTIFIED MALE: Senator Santorum --

ACOSTA: With the debate staged in Florida where senior votes are on the line, Romney once again pounded on Perry's past statements on Social Security.

ROMNEY: There's a Rick Perry that, almost a quote, it says that, that the federal government shouldn't be in the pension business, that it's unconstitutional. Unconstitutional and it should be returned to the states. So you better find that Rick Perry and get him to stop saying that.

ACOSTA: At moments, it seemed the punishment was taking its toll. Perry seemed to get lost delivering one zinger on the health care law Romney cast as governor of Massachusetts.

PERRY: I think Americans just don't know sometimes, which Mitt Romney they're dealing with. He's for obamacare and now he's against it.

ACOSTA: Except that Romney has never supported the president's health care law.

ROMNEY: Yes, nice try.

ACOSTA: But there were also standout moments for contenders trying to breakthrough on foreign policy, former Ambassador Jon Huntsman.

JON HUNTSMAN (R), PRESIDENTIAL CANDIDATE: Only Pakistan can save Pakistan. Only Afghanistan can save Afghanistan. All that I want right now at this point in history is for America to save America.

ACOSTA: And on the economy, probably the line of the night from former New Mexico Governor Gary Johnson.

GARY JOHNSON, FORMER NEW MEXICO GOVERNOR: My next door neighbor's two dogs have created more shovel-ready jobs than this current administration.

ACOSTA: Another defining moment didn't come from the stage. It came from a handful of people in the audience who booed a gay soldier for asking the candidates for their views on homosexuals in the military.

UNIDENTIFIED MALE: Do you intend to circumvent the progress made for gay and lesbian soldiers in the military?


ACOSTA: For a race that's come down to a Rick Perry versus Mitt Romney, it's unclear whether anything changed at last night's debate. Florida Republicans will have their say at a non-binding straw poll set for this weekend.

Jim Acosta, CNN, Orlando.


CHO: Palestinian President Mahmoud Abbas will stand before the U.N. General Assembly today and formally ask the world to accept the Palestinians as member. Here's the problem. He knows full well he'll be rejected.

ROMANS: Right. His support for statehood is slowly eroding thanks to heavy lobbying by the United States. CNN U.N. correspondent Richard Roth is with us this morning. Good morning.

RICHARD ROTH, CNN SENIOR UNITED NATIONS CORRESPONDENT: Good morning. Well, the Palestinians have been lobbying the nations on the Security Council. They need nine yes votes to be accepted in a Security Council resolution, but the U.S. has a veto that's potentially waiting.

Now, the battle is just beginning, because Mr. Abbas knows full well that all of that is taking place. Some say he's doing this for his legacy. Some say, as they say, they're not bluffing and could always go to the general assembly and get this non-observer state status.

U.S. ambassador to the U.N., Susan Rice told CNN's Wolf Blitzer how she sees it playing out.


SUSAN RICE, U.S. AMBASSADOR TO THE U.N.: The Palestinians know that this is not going to result in their becoming full members of the United Nations. Because we've made very plain if it were to come to it and if it were necessary, the United States would exercise its veto.


ROTH: The Palestinian leader is expected to deliver his formal application to U.N. Secretary-General Ban Ki-Moon probably before the late morning, early afternoon address and the Security Council, Susan Rice, yesterday said could meet to start discussions next week, but there's a whole process that will take place.

Mr. Abbas may come back. The idea is to get the two sides talking. The so-called quartet, all of these key players is going to try to come up with an immediate plan, start border discussion proposals, all with the destination of the state.

CHO: Meanwhile, there are a lot of fireworks yesterday with Iranian President Mahmoud Ahmadinejad.

ROMANS: Surprise, surprise.

CHO: Exactly. No surprise what he said, but I mean, I guess to a lot of people in the room, it was a little too much, right?

ROTH: Well, and we've seen this show on 42nd Street before, but the remarks get worse and worse. The Iranian leader questioning who was behind 9/11, what did it lead to, why are holocaust payments made, questioning everything.

But it was even tougher than other years. It really was more direct. There was no mention really of the Iranian nuclear program, which is what the U.N. member countries are concerned about, empty chairs in the hall.

The U.S., France, Austria walking out. Canada and Israel weren't even there. Everyone -- those diplomats know the plan. It's like going to a show and know, if this is bad and these lines are said in the dialogue, we're out of here.

This is what the British prime minister said. A very interesting quick moment as he exited the U.N. when asked about the speech.


UNIDENTIFIED FEMALE: Mr. Cameron -- President Ahmadinejad's speech today, sir?



ROTH: Dreadful was one the one-word answer, but he also denounced Ahmadinejad in his speech from the general assembly roster. This is a lingering issue that get submerged by other problems. Iran's nuclear program, it's intentions. Iran says it's also not going to recognize Israel, even if a Palestinian state is declared in a two-state solution.

CHO: But calling 9/11 a mysterious incident, I think takes a lot of - yes, exactly.

ROTH: Yes, right in New York City.

CHO: All right, Richard Roth, thank you so much.

ROMANS: All right, meanwhile, tensions arising between the U.S. and Pakistan. Yesterday's Senate testimony from Admiral Mike Mullen, the outgoing chairman of the Joint Chiefs triggering an angry response from Islamabad this morning.

Mullen insisting Pakistan's top spy agency, the ISI, had close ties to the Hakani network, a violent faction of the Taliban. Listen to what he told the Senate.


ADMIRAL MIKE MULLEN, CHAIRMAN, JOINT CHIEFS OF STAFF: The Hakani network for one acts as a veritable arm of Pakistan's Internal Services Intelligence Agency. With ISI support, Hakani operatives planned and conducted that truck bomb attack as well as the assault on our embassy.

We also have credible intelligence that they were behind the June 28th attack on the Intercontinental Hotel in Kabul and a host of other smaller, but effective operations.


ROMANS: Pakistan's foreign minister responded to Admiral Mullen's allegations and warned the White House it's in jeopardy of losing an ally.

CHO: The United States is facing a real possibility of a partial government shutdown in seven days. We have heard this before, we should tell you. The Republican-controlled House passing a $3.7 billion disaster aid measure late last night along with a stop gap spending bill that would keep the government from shutting down.

It calls for millions of dollars in cuts in the Energy Department to offset the cost of helping hurricane and wildfire victims, but Senate Majority Leader Harry Reid has already promised to reject it saying it's not an honest attempt as at a compromise.

ROMANS: President Obama, said to give states the green light to opt out of no child left behind. The plan would relieve school districts from stiff penalties for failing to meet targets.

These targets aimed at making all students proficient in reading and math by the year 2014. In exchange, states would agree to reforms favored by the federal government including linking teacher evaluations to test scores.

CHO: And expect a lot of silence to today House hearings into the collapse of Solyndra. The company's top two executives informing committee members they plan to plead the fifth and refuse to answer questions.

The California solar panel company went bankrupt after receiving a controversial half billion dollar guaranteed loan from the Energy Department.

ROMANS: All right, coming up on AMERICAN MORNING, an alarming discovery in Libya. We'll show you what some soldiers found locked in a warehouse.

CHO: Plus, former President Bill Clinton, and the mystery of NASA's missing moon rock. And look out below, we're tracking that satellite expected to fall to earth sometime today. It's 14 minutes after the hour. Be back after this.


CHO: Welcome back. It's 17 minutes after the hour.

New developments this morning out of Libya. The National Transitional Council says its forces turned up what appears to be radioactive material at a military base near Sava in Southern Libya. The site has warehouses containing barrels and plastic bags and yellow powder marked radioactive. Nuclear experts believe that Moammar Gadhafi was stockpiling yellowcake a form of uranium that can be used for nuclear purposes. ROMANS: All right. New this morning former President Bill Clinton offering up his plan for fixing the economy in a new book. It's called "Back to Work." It's going to come out in November. The book is a guide to the current financial crisis, what caused it, how to recover. Clinton says he wrote this book out of concern for America's future.

CHO: He's good at writing books.

Well, guess what, they found in an Arkansas library stuck in a box from files from Bill Clinton's years as governor. There you see it. And that is apparently a priceless piece of moon rock that's been missing for 30 years. Didn't know they were looking for it.

Now, according to NASA, it's one of 50 so-called goodwill moon rocks that were presented as gifts to each state. Now the rock's in a library safe, but officials say maybe we should move it to a museum.

ROMANS: Today's the day chunks of that falling satellite are expected to come crashing back to earth. NASA scientists, they still are not being - they can't pinpoint where or when, but they believe it's going to happen sometime this afternoon.

The good news, they don't think North America's going get hit. They say 26 chunks of the satellite will probably survive re-entry ranging from a few pounds to several hundred with a debris field spread over 500 miles. You know, what, 70 percent of the earth's surface is water. So they got a pretty good chance it's just going to splash down. Or so said Rob Marciano.

CHO: You know. But then there's Murphy's Law.

Rob Marciano at the Extreme Weather Center for us. Good morning.


NASA giving 3,200-1 odds of it actually hitting somebody.

ROMANS: But, hey, I'd buy a lottery ticket for 3,200-1 odds. Wouldn't you?


ROMANS: I would.

MARCIANO: I don't know if there's a Vegas bookie that's willing to take that bet, but, why not?

This is the satellite right here. And this is where it's going or the actual track of it. Widen - widen out, widen out to show the map. There we go.

All right. Back through the satellite tracking device. Here's where it is live. There you go. There's Africa, Madagascar, Antarctica. And streaming around the earth that way. It was just over Graceland about 20 minutes ago. So it's moving pretty fast. And as we mentioned, it's expected to come back to land sometime probably late afternoon or - or this evening sometime, and NASA as of - (INAUDIBLE) an update, they really don't know when. So they haven't really narrowed it down that focus anymore. So it will be more of an (INAUDIBLE). And once it starts tumbling through the atmosphere, we lose track.

Got to get track of this one, Tropical Storm Ophelia went to 45 miles an hour. So it had decreased in intensity. We knew that. It has some pretty strong head winds they had to deal with, but it will be heading towards the U.S. probably as a weak storm of some sort and then it will peel off, because we got a pretty strong front that's creating some rain across the Deep South, across the Mid-Atlantic and up through the northeast, and this will begin to fill in across the northeast.

Right now, not a whole lot of rain but some moving into D.C., into Baltimore, into Philly and this will create some flooding issues, I think, as we go through the weekend. So heavier rain is expected from D.C., Philly, Baltimore, up to New York. And we've got some flash flood watches up. So not the best of weekends for the northeast, but better weather is on the way next week.

ROMANS: All right. There you go. Thanks, Rob.

MARCIANO: All right.

CHO: Thank you, Rob.

Coming up on AMERICAN MORNING, a struggling computer company hopes that a new boss can help turn things around. There she is there. She ran for governor of California, and she also ran eBay. We're "Minding Your Business."

ROMANS: Also taking the plunge again. Swimmer Diana Nyad, 62 years old, she's going to take on the current. She's going to tempt the sharks. She's going to try it one more time.

It's 21 minutes after the hour.

CHO: Sixty hours of swimming -


ROMANS: Welcome back. "Minding Your Business" this morning.

Right now U.S. markets poised to rebound, maybe, after a miserable day on Wall Street yesterday. The Dow, NASDAQ and S&P 500 yesterday lost more than three percent, a two-day loss of the Dow, the biggest since 2008. European markets losing some of their early gains this morning. We'll see if U.S. futures stay up as we get closer to the opening bell.

Investors lost $500 billion in stocks just yesterday alone on the Wilshire 5000 and $1.1 trillion gone in stock market value this week going into today's session. That Wilshire 5000, that's the broadest gauge for U.S. stocks.

Former eBay chief Meg Whitman stepping in as the new CEO and Chairman of Hewlett Packard. HP's Board not happy with Leo Apotheker at the helm. The company's stock dropped more than 40 percent this year.

Mortgage rate, they are remaining at record lows for the third week in a row. It has never been this cheap to borrow money to buy a house. The Feds bond twisting stimulus plan expected to push down long-term interest rates for mortgage - mortgages. The average rate on a 30-year fixed rate mortgage is now 4.09 percent that's according to Freddie Mac. You may want to check into your financing.

Americans are swiping their card like it's 2008 literally. The amount of credit card debt added in the second quarter is up 66 percent from the same time last year. Credir card research firm says it hasn't been that high since 2008 when credit debt was at its peak.

AMERICAN MORNING will be right back after this quick break.


CHO: Good Friday morning. It's half past the hour. Here are your morning's top stories.

Yemen's president has returned after nearly four months in Saudi Arabia according to State TV. He was injured in an attack on his palace and left the country back in June. His return comes as the capital city is ripped in bloody street battles that have reportedly killed dozens of people in just the past week.

ROMANS: Getting a little ugly between the two frontrunners for the Republican nomination. All of the major candidates squared off last night in their third debate in as many weeks. And while Rick Perry and Mitt Romney went at each other over flip-flopping health care and Social Security, former Utah Governor Jon Huntsman may have found a scene. Two new polls showing Huntsman climbing into double digits now in New Hampshire, a must-win state for him.

CHO: And President Obama, the incumbent, offering states a way to get around the No Child Left Behind law. In just a couple of hour, President Obama will announce relief from key provisions of the law in exchange for a commitment to broader reforms.

ROMANS: Ah, but a very rough week for 401(k)s. Investors taking a beating like they have seen in three years. In fact, analysts saying it's beginning to feel a lot like 2008 all over again although with different factors.

Are we on the verge of another financial meltdown? Let's ask Matt McCall, president of the Penn Financial Group.

Matt, the last two days were just horrible. Are there any reasons to be positive out there when you look around the world?

MATT MCCALL, PRESIDENT, PENN FINANCIAL GROUP: I think there are reasons to be positive. And many times, investors make emotional decisions. And I think right now, our emotions are definitely riding very high, considering the news coming out, whether it be from Europe or from China slowing down, or even here in the United States.

So, it's very difficult for people to have that long-term mentality. So, we've lost that quite a bit. So, we're seeing individual investors, kind of, throw up their hand and say, I'm done with the stock market until some good news comes out. Unfortunately, by the time the good news comes out, the stock market's rallied 60 percent.

ROMANS: Telling you, looking ahead. And so, the stock market, this summer, very well could have been forecasting what we're hearing now, that it's very slow and probably, some economies on the verge of recession again.

MCCALL: And a lot of people say, well, we could have a double dip recession. But I think we've actually priced that double dip recession in already. So, if we do not have a recession next year, which I don't really think we're going to. A lot of estimates have global growth at about 4 percent. It isn't great, but not bad.

ROMANS: Right.

MCCALL: U.S. growth, 2 percent. I'll take 2 percent next year, if we can get 2 percent growth. And if that's true, I think the stock market is in much higher 12 months from now.

ROMANS: IMF says 1 1/2 percent growth in the U.S. And you know what? That doesn't feel good to a lot of people looking for a job. There's not a lot to be confident about.

Individual investors are throwing up their hands, but I keep hearing people say, what are you supposed to buy at a time like this? You know, what are you supposed to buy in stocks?

MCCALL: I mean, I think you can find some really high quality stocks. I know it's easier said than done to find those high-quality stocks, but stocks like Apple, for example, hit an all time high just three days ago. So, things are -- people are actually buying, people have demand, and services are still doing well. I think you have to look at areas like that.

The utility index, which is a big index, hit a three-year high just this week as well. So, there are places that are doing much better than the average market. But when we had a sell-off, the last two days, whether it's stocks, whether it's gold, whether it's oil -- they're all going down.

So, it's very tough to find somewhere to hide in this type of market.

ROMANS: That's the thing that doesn't seem to be a place to hide. It's been selling of gold, selling of oil, selling of stocks. And you look at treasury yields -- unbelievable. Everyone's running into treasuries, you know, the U.S. safe haven. That's driving down yields. The fix -- a fixed rate mortgage, 4.09 percent for a 30-year. I can't believe the words are cupping out of my mouth.

MCCALL: I know. When I heard you say that a few minutes ago, I think to myself, I have to go out and buy a home.

The problem is, people may want to buy a home, but they can't get the loan, number one. Number two, maybe you think you want to, but you still have that mentality now that there's a negative mentality looming everybody in the United States, that they don't want to make the big purchase because of a lot of unknowns going forward.

And, looking at, you know, 1.1 percent on a 10-year treasury, who in their right mind will loan the U.S. government money for 10 years at 1.1 percent per year?

So, I think, eventually, people are going to say, I'm not, you know, getting bonds at 1.7, stocks become so attractive at some point, you're going to see money come back in.

ROMANS: Well, if you're a saver. I mean, the thing that really hurts, if you're a saver or a charity or someone who is living on the proceeds of those investments and treasuries, you're not getting any money.

MCCALL: Yes, with inflation which is starting to creep back into the market right now, you're actually losing money, especially a saving money. You know, people are going to cash now, getting 0.5 percent if they're lucky. Inflation is actually eating away your money. So, you're losing money as you dig a hole and bury it.

ROMANS: People want to know, what should I do with my 401(k), and Ali Velshi and I would like to say, if you're just now figuring out a log-in for your 401(k), you know, you can't do that. You're going to make a mistake.

Do you agree?

MCCALL: I agree 100 percent. People finally log-in, where they're hitting high or hitting low. That's the only time they go into the market.

ROMANS: I don't mean to laugh, but it's true. You're so emotional and making the move. It's already happened.

MCCALL: Many people sell the low, and then buy at high. At this point in time, you're putting in regular contributions, you're actually dollar cost averaging in. This is a good time to keep putting money into the market over time. You know it's coming back.

ROMANS: If you're 60 and you still have a lot of stock, well, first of all, you have too much in stocks if you really exposed to stocks. You shouldn't have been there.

MCCALL: You shouldn't have been there in the first place.

A quick question about Europe. We keep hearing about these banks in Europe and how much of Greece's debt they hold or they hold debt that is related to Greece. How important is Europe to the situation for the U.S.?

MCCALL: I think it's very important now. Not as much because -- you know, a lot of European banks own this Greek debt. Something happens to Greece, if they default, they're going to take a hit.

The U.S. banks don't have as much exposure to the Greek debt. But, again, it's a mentality thing that no matter what happens, I was watching a Canadian banks yesterday, for example. They're down 7 percent, 8 percent. Majority of them have zero exposure to anything going on in Greece or anything around Greece.

But what happens is, when you see something going on, we sell first, ask questions later. So, I think that's exactly what will happen. So, in my mind, Greece is important in the short term. But long term, I don't think it's going to affect the market like many believe.

ROMANS: All right. Matt McCall, Penn Financial Group -- always nice to see you. A voice of reason in a very scary, scary week for stocks. Thank you, sir.

CHO: All right. Here's what's new this morning. Certainly something you don't see every day: 150 students sitting a hall at U.C.-Berkeley, protesting what they call the death of public education. They're angry over a proposal that would almost double their tuition over four years. Two people reportedly arrested. A U.C.-Berkeley spokeswoman says campus police first used pepper spray against the students but then backed of and let them through.

Nineteen hundred teachers in Tacoma, Washington, will be going back to school this morning. They voted for a deal to end the strike that shut down classes for more than a week. The agreement comes after the state's government sat in on talks for most of the seven- hour bargaining session. Teachers even ignored a court order to go back to work during the dispute.

And she's taking the plunge again. Diana Nyad, the 62-year-old endurance swimmer now tells us she will make another try at a record 100-plus-mile swim from Cuba to Florida, and she's jumping in tonight. She tried this a second time over the summer. We followed her along the way in dangerous currents and shark infested waters. But she had to be pulled out after 60 miles and 29 hours of swimming. She's trying for the world record for the longest ocean swim without a shark cage. She is one brave woman.


CHO: Sixty hours in the water, if she makes it.

ROMANS: Yes. She is so fit. It's unbelievable. And her mental -- her mental focus is just unparalleled.

CHO: I can only imagine. Well, best of luck to Diana.

ROMANS: Ahead on AMERICAN MORNING: The new face of poverty in the U.S., hospitals reporting a sharp rise in child malnutrition. Deb Feyerick goes in-depth for us, next.

CHO: And a discovery that could change the universe. We mean it. A group of scientists say they've done something that Einstein said was impossible.

It's 37 minutes after the hour.



An in-depth look at new face of poverty in America.

CHO: That's right. This morning, we're visiting Boston, where the high cost of housing and heat have many families cutting back on food.

Deb Feyerick with part two of her special report -- good morning.


Well, you know, when we think about malnourished children, usually, we think of children in other countries like Africa and Somalia. And yet the problem is much closer than you might think.


FEYERICK (voice-over): Looking at Joven Louis (ph), you would never guess this playful first grader suffers from chronic malnutrition.

His mom Rolande Decossa earns less than $10,000 a year at her part-time job. And even though the single mom gets help from food stamps, she still worries constantly about not having enough to eat.

ROLANDE DECOSSA, SINGLE MOM: I'm shaking. Shaking. It's like -- crazy. You know -- number one thing, you've got to take care of the house, but I set out to see how I'm going buy food for my kid.

FEYERICK: Figures show, nationwide, more than 16 million children like Joven live in homes with parents struggling to put enough food on the table.


FEYERICK: Dr. Megan Sandel treats Joven at Boston Medical Center's unique Grow Clinic, which specializes in treating underweight and malnourished children.

UNIDENTIFIED FEMALE: Step right on the scale -- 37.2 pounds.

FEYERICK: The 6-year-old Joven currently weighs as much as an average 4-year-old.

SANDEL: People think about acute malnutrition and may look at Somalia or something like that. What we see is chronic malnutrition, stunted growth -- kids that are the size of a 1-year-old when they're 2 years old. And they're not going to be able to make up that for the rest of their lives.

FEYERICK: Emergency rooms in Boston are seeing a spike in severely underweight children ages 5 and younger -- a crucial period for brain growth and child development. These kids are more likely to get sick and fall behind in school.


FEYERICK: Pediatrician Deborah Frank runs the growth clinic and sees as many as 40 children a week.

FRANK: Some kids are obvious. You can count their ribs. Their arms and legs look skinny. Their heads look big.

The scary thing is that even when you feed kids and get them going again and get them physically growing, you can find deficits in learning and behavior all the way to high school.

FEYERICK: In other cities like Baltimore and Minneapolis, many doctors say the numbers of malnourished kids doubled in the last two years because of the recession.

Boston's Grow Clinic opened a pantry where doctors now write prescriptions for food.

SANDEL: We thought we were going to serve 500 families month. And we last month served 7,500 families. And so, you can imagine, we're handing out over 70,000 bags of food every single month.

FEYERICK: More than 40 million people received food stamps in the summer of 2010 alone, a record high. Some in Congress are talking about cuts in that and other nutrition programs.

FRANK: Thought of somebody saying we're about to have a plague epidemic. So the government is cutting back on immunizations and antibiotics to save money, just as the plague is hitting.


FEYERICK: And there are a lot of consequences, obviously. Once brain development is stunted, children lose that critical window of normal growth. Doctors say that lawmakers really have to decide whether they're going to invest now by continuing these nutrition programs, and that would be proactive, or whether they're going to have to deal with a host of social problems later.

One of the reasons the doctors think that Joven lost weight is because he wasn't in school, he wasn't getting a free lunch, and he wasn't getting a free breakfast as well. And they think that contributed to some of his weight loss over the summer.

ROMANS: Lots of people might not know that the school districts are feeding children sometimes three meals a day. Hunger they say is the enemy of education. It costs more to the system. It makes the teacher's job harder when a child is hungry and can't learn.

FEYERICK: Absolutely. Absolutely. They start the day unable to learn because they're tired, and they're cranky. And so, it's not a healthy learning environment.

But, again, you're looking at kids who are getting into hospitals longer and staying there longer. Obviously, that takes a toll on the hospital system. You're talking about kids also who may drop out of school, and that's a problem that has to be dealt with.

So, really, it's cumulative.

CHO: Deb, thank you very much. I think a lot of people forget as you pointed out, that there is poverty right here in the United States. It's not half a world away.


CHO: It's in our own backyard.

Deb Feyerick, thank you so much.

Coming up on AMERICAN MORNING: America's pastime. Connecting with kids half a world away.

ROMANS: All right. This is a very important story to me. It's a celebration 25 years in the making. You know, good western girl, these are our heroes, right? The Fridge, Coach Ditka, the rest of the Da Bears, finally getting their trip to the White House, all these years later. Forty-five minutes past the hour.


CHO: Forty-seven minutes past the hour. Here's what you need to know to start your day.


CHO (voice-over): Fears of another global meltdown sending markets tumbling. Asian markets down sharply again overnight after U.S. and European markets suffered another steep sell-off.

This country's spiraling towards civil war, state TV and Yemen says President Ali Abdullah Saleh has returned. Saleh spent three months in Saudi Arabia after being badly injured in an attack on his palace.

She was kidnapped at age 11 and held 18 years. Now, Jaycee Dugard is suing the federal government for negligence. The complaint says authorities to fail to properly monitor her captor, convicted sex offender, Phillip Garrido, who was on parole when he abducted her.

President Obama (INAUDIBLE) key elements of no child left behind, the Bush administration's signature education initiative. The president will unveil his new plan this morning, which includes allowing states to opt out of the law's toughest requirements.

Solyndra's top two executives plan to plead the fifth at a house hearing today. The California solar panel company went bankrupt after receiving a controversial half billion dollar guaranteed loan from the energy department.

And eyes on the sky. In a few hours, NASA expects the remnants of a six-ton space satellite to come crashing back to earth. Now, they don't know where the space junk will fall, but NASA scientists say it won't be in the United States or anywhere in North America. At least, that's what we think.


CHO: That's the news you need to know to start your day. AMERICAN MORNING is back after this.


ROMANS: Welcome back. It is a discovery that has scientist scratching their head this morning and may turn the universe upside- down. I don't know if we can actually go on. An experiment as stern (ph), the world's largest physics laboratory has found particles that, apparently, travel faster than the speed of light.

Something Einstein said could not happen. It would shake up the foundation of physics that have been there since Albert Einstein published the theory of relativity more than a hundred years ago, but of course, they said, they need to do more research to confirm this.

CHO: 186,282 miles per second was the cosmic speed limit. Apparently, it's been broken.

ROMANS: (INAUDIBLE) went slightly faster, apparently.

CHO: That's right.

The Peace Corps now celebrating its 50th anniversary. Former Peace Corps volunteer and writer, Maureen Orr, along with filmmaker, Susan Koch, traveled the world to highlight the work of current volunteers and those who experience significantly influenced their life.

ROMANS: They include Moses Waterland who's using baseball to connect with kids in a remote village in Morocco.



ALL: First base. WATERLAND: Second base.

ALL: Second base.

WATERLAND: Third base.

ALL: Third base.


ALL: Home!

WATERLAND: I'm a health volunteer, and basically, my primary job is to lead a maternal and early childhood health conference. The baseball team got started by, basically, because we started out playing Frisbee, and the kids, they play pretty rough and they broke the Frisbee right away, so I had to come up with something else, because they kept coming to my door every single day.

So, I found an axe handle, a tennis ball. We went out next to my house and started throwing the ball around. A lot of the older men don't want me to take their kids away from working the fields. So, sometimes, we have to kind of sneak out in this kind of evening. This village is called Agadeem, and it's way up in the mountains. Off and on running water. Electricity off and on. It's very poor.

These people, they make the best of what they have out here. Some of the happiest people I've ever known, even though, they really don't have that much stuff. When I had my interview prior to coming here, they asked me if there was any reason why I would quit? And I told them, I won't quit. And so, a lot of volunteers make joke that that's why they put me way out here.

So -- I've been here over a year. And, at first, it was really stressful, because I came from living in New York City for almost two years, and coming out here is just -- I mean, even leaving New York City for a couple of days feels like you're falling off the face of the earth. And when I came out here, it was probably the toughest thing I've ever done in my life.


WATERLAND: He really likes Moses. He says he's the best foreigners out of all the foreigners out there. He gave me a hat, and he says, in baseball. He loves to run around the bases, and he loves to hit the ball.

The first time I actually had a real baseball game happen, it was even surprising for me that they were actually doing it. This thing and look in their eyes when they finally grasped the concept, really rewarding experience.


ROMANS: That's cool. Enlisting volunteers to serve as ambassadors of peace in foreign countries is one of the first orders of business after President Kennedy took office back in 1961. Peace Corps volunteers typically work abroad for a period of 24 months following three months of training.

CHO: I think this next story is probably your favorite one of the day.

ROMANS: It is, actually.

CHO: You know, the Super Bowl champion, Chicago Bears, will be honored next month at the White House. We mean the Super Bowl champions from 1985, that is.


CHO: They've been invited by President Obama, a Chicago resident himself, to make up for a visit that was cancelled 25 years ago following the "Challenger" disaster. Now, the 1985 bears lost just one game. They're generally regarded as one of the best if not the best defensive teams in NFL history.

ROMANS: And I went to one of those games in Soldier Field that season, and it is to this day, one of the highlights of my life.

CHO: A well known fact as my first local news job was in Chicago, and one of my first jobs was to go into the locker room after the Bears game. And let's just say it was an eye-opening experience.


ROMANS: Oh, yes.

All right. Well, so, congratulations 1985 championship Bears. Can't wait.

Well, they let him have it back home. Jay Leno noticed something a little funny when lawmakers came back to Washington. Take a look.


JAY LENO, HOST, THE TONIGHT SHOW WITH JAY LENO: Well, another record broken this week. Congress' approval rating now all-time low, just 12 percent.


LENO: You know, a lot of politicians, a lot of these congressmen went back to their home districts this weekend. And, you can tell their constituents are fed up with them. I mean, you can see it in their faces. They show Congress today.

UNIDENTIFIED MALE: Mr. Speaker, I yield myself such time as I may consume.


UNIDENTIFIED MALE: They're telling seniors to pay more for health care.


UNIDENTIFIED MALE: The issue is where do the spoils go.


UNIDENTIFIED MALE: Without additional assistance, the capacity to respond in the future --




ROMANS: Funny.

CHO: All right. This morning's top stories are straight ahead on this AMERICAN MORNING. The dramatic return of Yemen's president as his country spirals towards civil role -- war, rather . Find out why this is so significant, and why the U.S. is watching this situation so closely.

ROMANS: Plus, the best one-liner at last night's GOP debate coming from a candidate you probably never heard of. It's 55 minutes after the hour.