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Obamacare Hearings; Jury Finds That Countrywide Defrauded Fannie And Freddie; Back On The Court

Aired October 24, 2013 - 05:30   ET



CHRISTINE ROMANS, CNN ANCHOR (voice-over): The White House playing defense. Politicians from both sides of the aisle demand accountability for the Obamacare website's rough launch.

UNIDENTIFIED MALE: she is one of the nicest teachers in town. Always went out of her way to talk to you and always saying hi to everybody. It was just -- it's a real tragedy.

JOHN BERMAN, CNN ANCHOR (voice-over): Really tragic. A popular high school teacher found murdered. Now, a 14-year-old student stands charged with this crime.

ROMANS: A bitter taste of winter for parts of the country this morning, waking up in temperatures 20 degrees below zero -- below normal, I should say. Now, don't you feel better about it? How cold it's expected to get?

BERMAN: Everything is relative. Still, pretty freaking cold this morning.



BERMAN (on-camera): Welcome back to EARLY START, everyone. I'm John Berman.

ROMANS (on-camera): I'm Christine Romans. It's 31 minutes past the hour.

BERMAN: In the highly anticipated hearings on the troubled rollout of the Obamacare website, they get underway on Capitol Hill in just a few hours. The original website developers (ph) to answer questions about the problems that have plagued the online health care enrollment. They are expected to say, hey, not our fault.

Health and Human Services, Kathleen Sebelius, she will not be at today's hearings. She's in Arizona touring an Obamacare call center. Now, the secretary is expected to testify next week at more Obamacare hearing. She is getting plenty of heat as the administration's point person on health care. CNN's Brian Todd has more on the secretary under fire.


BRIAN TODD, CNN CORRESPONDENT (voice-over): She says this is the most important work she's ever done in her life, but Kathleen Sebelius is on the ropes as she tries to carry it out. In an exclusive interview with CNN's Dr. Sanjay Gupta, President Obama's Health and Human Services secretary repeatedly dodged questions about the rollout of Obamacare.


KATHLEEN SEBELIUS, HEALTH & HUMAN SERVICES SECRETARY: We'll be doing what we've done with every other program.

GUPTA: Would you consider resigning over this?

SEBELIUS: I think my job is to get this fully implemented and to get the website working right.

TODD: Sebelius certainly knows how to navigate tumultuous political waters. The daughter of a Democratic governor of Ohio, daughter-in- law of a former Republican congressman from Kansas, and wife of a federal judge.

RON POLLACK, FAMILIES USA: I think she learned a great deal from that and I think it has served her very well.

TODD: This isn't her first health care battle. As governor of Kansas, Sebelius, a catholic, drew the wrath of the church for vetoing a restrictive anti-abortion bill, tried and failed to finance expanded health care coverage through cigarette taxes. As the state insurance commissioner, she fought to bring premiums down, but a critic says she drove insurers out of the state by regulating them too much.

VOICE OF TODD, TIAHRT, FORMER CONGRESSMAN, (R) KANSAS: They felt like they were in a position where it was not profitable to do business in Kansas. So, it limited our choices for health care providers.

TODD: Ron Pollack, a close ally, says Sebelius' focus was to help consumers above others.

With the pressure on her comes, I guess, a criticism of her management style, you know, how is she as a manager?

POLLACK: I think she's an extraordinary manager. She not only is smart and is very thoughtful, but she also has a listening style that I think is very important for this position.

TODD (on-camera): Pollack thinks Sebelius will survive all of this, but she has lost a personal ally from across the aisle. Kansas Republican senator, Pat Roberts, a longtime family friend, who once worked for Sebelius' father-in-law was among the first in Congress to call for her resignation.

Brian Todd, CNN, Washington.


ROMANS: A 14-year-old boy is charged with murdering a high school teacher in Danvers, Massachusetts.


ROMANS (voice-over): Authorities say the suspect, Phillip Chism (ph), was a new student at the school and was in one of Colleen Ritzer's (ph) classes. The teacher's body was found in the woods behind the high school. The crime has stunned the suspect's classmates.


ARIANA EDWARDS, CLASSMATE OF ACCUSED KILLER: Well, first I found out that he was missing and, like, this was last night, and I was, like, shocked by that, because I was, like, why would he go missing? Like, did he get kidnapped or did he run away? Everyone was, like, praying for him to find him. But then, once I found out that, like, in the morning, like, he was like -- there was like a homicide, I was like wondering who was connected.

So, that's the reason why we didn't have school because of a homicide, but then I was, like, really shocked that it was him-like I -- wouldn't have suspected it at all. I was, like -- like people say it's always the quiet ones, though, so, like, maybe that's why, like, it could have been, like if he had troubles at home or something. But he was nice.


ROMANS: Prosecutors say they'll ask a grand jury to indict the 14- year-old suspect as an adult.

BERMAN (voice-over): Sparks, Nevada, still a city in mourning days after a seventh grader there shot and killed a teacher and wounded two other students at his middle school. The 12-year-old shooter also took his own life. As students returned to class Wednesday at this school, the mother of one of the injured students spoke about the tragic incident.


JENNIFER DAVIS, MOTHER OF SHOOTING VICTIM: He's in good spirits, although, he's saddened by the death of his friend, Mr. Landsberry. From what we've learned from others at the scene, Mason's first instinct was to intervene and tried to help Mr. Landsberry. We do not believe that he was in any way a target of the shooting. And it's my understanding that he was trying to help Mr. Landsberry when he was shot.


BERMAN: Police say the parents of the shooter could be charged because the gun he used came from their home.

ROMANS: Authorities in San Francisco are investigating reports that a hospital employee stepped over the body of a missing patient days before she was identified. Fifty-seven-year-old Lynne Spalding disappeared from her hospital room and was found dead more than two weeks later in a stairwell. The "Los Angeles Times" is reporting that the employee reported the body to a nurse. She called police, but then days passed before anything was done.

BERMAN: It's awful. The source of some cases of severe stomach bug outbreak traced to Mexico. The CDC reports some cyclospora cases in Texas which was hardest hit came from the fresh cilantro from Pueblo, Mexico. They say it was served at Mexican style restaurants and was sold at a single grocery store. The FDA would not name the establishments. At least two separate outbreak last summer left 640 people sick in 25 states.


BERMAN (on-camera): Thirty-seven minutes after the hour. Chilly. Very chilly this morning. A major cold front moving through parts of the country. Temperatures as much as 20 degrees below normal.

ROMANS (on-camera): Karen Maginnis joins us now with just how cold it's going to get. Good morning.

KAREN MAGINNIS, AMS METEOROLOGIST: Yes. Good morning, Christine and John. And yes, these aren't staggering snowfall totals but impressive. Sault Ste. Marie just about 4.5 inches of snow there.

Dayton, Ohio saw about an inch, but this a little bit early for some of these folks to be picking up even these amounts, but the cold is solidly in place wrapped around the Great Lakes with those very prone snow effect or lake snow effect zones in the Eastern Great Lakes extending on over toward Syracuse and Buffalo.

Now, the snowfall isn't going to be heavy but is going to be fairly persistent off and on throughout the day with the wind blowing in from the east.

And as a consequence, some of those wind gusts may be gusting up to as high as 40 miles an hour, making it feel bone chilling cold and with these temperatures already a good 10 to as much as 20 degrees below where they should be, bundle up because it is going to be very chilly outside, especially in the Eastern Great Lakes. Temperatures only making it to the 40s. John, Christine, back to you.

BERMAN: We're ready for it. Bring it on.


BERMAN: All right. Thanks, Karen. Appreciate it. We'll be right back.


ROMANS: All right. Its nickname was the Hustle and prosecutors say it stood as a symbol for the fraud rampant during the housing boom. A federal jury ruled Wednesday that Countrywide Financial defrauded Fannie Mae and Freddie Mac by selling them defective mortgages ahead of the financial crisis. Countrywide is now owned by Bank of America. The program in question was called the High-Speed Swim Lane nicknamed the Hustle.

Prosecutors say it was intentionally designed to process loans at high-speed and without quality checkpoints and generated thousands of fraudulent and otherwise defective residential mortgage loans. The jury also found a former Countrywide financial executive liable for fraud for her role in leading the loan processing program.

The government has not said specifically what amount it is seeking in civil penalties, but the alleged fraud cost Fanny and Freddy 131 million. Bank of America and the former executive have denied any wrongdoing.

After a four-day winning streak, they saw successive closing highs. The S&P 500 slipped on Wednesday. That's just began to focus on corporate earnings including a (INAUDIBLE) look on business from Caterpillar. The major index is closing lower across the board. I want to show you where we are, though, as we head to the last few months of the year.

This is some perspective for you, folks. The Dow is up 18 percent this year. The NASDAQ is up 29 percent. The S&P 500 up 22 percent.

BERMAN: Our daily happy moments.

ROMANS: I know. I try to do it every day just to remind you where we've come. And here's something else worth noting, the ten-year treasury yield now stands at 2.49 percent. This is the first time it's dropped below the 2.5 percent mark since July. The yield on the tenure is falling about a half of percentage point from its early high.

It's high in early September. Falling tenure yields will likely push down mortgage rates. That chart right there means likely lower mortgage rates. Good for you if you're financing or first-time home buyer.

And fresh off a nearly $1 billion profit on a chunk of Netflix stocks just (ph) last week. Carl Icahn hasn't forgotten that he wants Apple to do a bigger share buyback. Icahn tweeted on Wednesday "Just sent a letter to Tim Cook. Full letter will be disclosed on my website." The shareholder's square table which will be launched tomorrow.

The site hasn't launched yet. We'll be looking forward, of course. But when Icahn tweets, people listen. And they'll be interested to see what that letter to the Apple CEO had to say. I mean, he's an activist investor. He tends to go and buy big chunks of company and then, you know, advocate for change. You've got a large position in Apple back in August. He's been lobbying for the company to return more of its cash ward (ph) to shareholders.

BERMAN: His use of twitter is fascinating, by the way, because it drives pricing and market in and of itself.

ROMANS: The whole Twitter phenomena in stock markets has been just really interesting to watch. Really interesting.

All right. Time now for the "Morning Rhyme," our tweets of the day. First up, from Ericson (ph),

BERMAN: Yes. Check this out. "He says make way for ducklings are getting mighty quacky. The Sox win tonight from John Lackey." You know, from my Sox fans, you know what that means. I had to put in there. It was good.

ROMANS: And then, there's this one from Sam, "Don't fear the financial foamans when on your side, you have Christine Romans."

BERMAN: Well done. Well done.

ROMANS: You're the best.

BERMAN: You can always come up with your own tweet. Send them our way. The hash tags are MorningRhyme and EARLYSTART. We love getting them. They have been fantastic, folks.

Coming up for us next, a big blowout in game one of the World Series. The Boston Red Sox won big. We will break down the game action and also the big surprises. Andy Scholes joins us live coming up in the "Bleacher Report."


BERMAN: You could hear the screams coming from Fenway Park last night. Screams of ecstasy. The Red Sox --


BERMAN: -- they came out and they crushed the Cardinals.

ROMANS: Berman, come on, it's a baseball game!

BERMAN: I know. It's a family game, too. Andy Scholes joins us with the "Bleacher Report" now.

ANDY SCHOLES, BLEACHER REPORT: -- screams are coming from your living room as well, right, John?

BERMAN: Indeed.

SCHOLES: Especially early on in the game, you know, because it was awesome for the Red Sox now. For the Cardinals fans, it was not awesome. The Red Sox, they were definitely Boston strong last night and early and often in this one. They jumped out to a 4-0 lead and it could have easily been much worse.

They could have been 8-0, but Carlos Beltran made an amazing catch in right field. Check it out. Big Papi going for the grand slam and Beltran reaches over the wall and makes the catch. Bad news, though, for Cards is he bruised his ribs on the play. He will leave the game later. Big Papi, though, he would not leave the game. He would come back up in seventh inning and get his revenge, this time, make sure no one could catch it. Now, the two run home run. Red Sox cruise to an 8-1 win. Game two is tonight. First pitch tonight is at 8:00 Eastern.

All right. A high school football team in Wisconsin turned a big win into a very special moment for their water boy. Noah Van Buren (ph), a popular senior who has Down syndrome suited up in pads and a helmet for little shoots last game of the season. And with 1.2 seconds on the clock, they called a time out, brought him out on the field, and he got the handoff and went 35 yards for the touchdown, and then he was swarmed by his teammates. Definitely a great moment there --

BERMAN: Best run of the game.

SCHOLES: Definitely was.

All right. For the first time in nearly four years, Greg Oden, that's right, Greg Oden was back on the court. The former number one pick is considered a huge bust. He got in the game for the Heat last night in the preseason. He actually threw down that dunk right there. The bench jumped up and everyone, of course, was very excited for him.

Lebron tweeted after the game, "Couldn't imagine being away from the game for three years. Feel like a proud big brother." Now, Oden is, of course, trying to revive his career that has been derailed by several knee surgeries over the years. Every time -- looked like he was going to come back and knee would swell up and he had to have surgery. So, good for him back on the court.

All right. Trending right now on, Notre Dame beat USC this Saturday. And during the game, Notre Dame running back, Cam McDaniel, had his helmet ripped off during a run, and this picture was taken. It looks like it's out of an Abercrombie and Fitch ad, but no. This was the real play. He was being tackled by a 300-pound lineman, still manages to make this --

ROMANS: Look how good his hair looks.

BERMAN: Such a blue still (ph) look with the hair. Not to mention the exposed bicep there.

SCHOLES: And it looks like he's looking right to the camera.

ROMANS: He has no trouble getting a date. That's all I got to say.

SCHOLES: Now, this picture, of course, has gone very viral. People like making their captions. My favorite is "rushes up the middle and straight into our hearts."

ROMANS: He looks like Tom Brady. I think --

BERMAN: He looks good. That's for sure.

(LAUGHTER) BERMAN: Stick around, Andy, because game one of the World Series, you know, it was one for the ages, and one lucky fan, he has the story of a lifetime. Baseball fan, Eric Jabs, was looking for a ticket on StubHub when he stumbled across a $6 ticket, $6, for the World Series. Sounds impossible, right? It was. It turned out to be fake, but StubHub sent Eric to the game any way.

ROMANS: And he joins us right now. And wow! What an amazing stroke of luck for you! you got a seat. That's, what, 750 bucks retail is what one of these seats go for, right?

BERMAN: It ain't cheap.

ROMANS: How was it?


ROMANS: All right. We're going to have the whole interview. We'll be right back.

BERMAN: No, no. We're going to stay. We're going to talk to him while we have him here. I think that's a better idea. Eric, so where we at seating (ph) and everyone around you. Give me a sense of how much they paid because you paid exactly nothing for that seat.

JABS: Yes. I got the ticket for free. I originally paid $6, but StubHub eventually gave it to me for free since it turned out to be a fraudulent ticket. So, I was actually sitting in right field box section 97 which is just past first base and pretty close to the field. I was about 15 back (ph) right there close to the action.

BERMAN: And you, sir, you are a big baseball fan. Season ticket holder to the Pirates, correct?

JABS: Right. I'm a full season ticket holder to the Pirates. And, last night was my 109th game that I've attended this year.

ROMANS: Wow. You're rooting for the Red Sox because the Cardinals knocked out your Pirates, right?

JABS: Yes. The Cardinals knocked out my pirates in the NLDS round. So, unfortunately, Cardinal fans, I just can't --


BERMAN: Eric, biggest back (ph) here for a second here, so you're on StubHub looking for a seat to the World Series and you see one advertised for six bucks. What goes through your head?

JABS: Well, my first thought was, I need to buy this immediately because somebody else is going to snap that ticket up within a few seconds. So, I immediately typed in my password and my credit card information and I purchased the ticket and then I got the e-mail several minutes later from StubHub with downloaded instructions to get the $6 ticket. I printed it out and I had it in my hand. And, I thought I was going to the World Series for $6. Unfortunately, it turned out to be a fake ticket. So, then came the crushing news that, oh, I'm not going to the World Series. I'm getting my $6 back. The next day, StubHub, they contact me and said we're going to make this right. We're going to send you to the World Series. So, it was kind of like a roller coaster of up and downs, but it turned out to be a happy story.

BERMAN: So, right away, they told you you were going to get a new ticket. They never said, oh, this is just going to be canceled and you're out of luck, you're not going to the game?

JABS: At first, they said that they were going to give me a $50 dollar comp credit.


BERMAN: But you're a smart man. You --


BERMAN: StubHub decided they better step up and do right thing here. Let me ask you this. You're not just an average fan. As I said, a Pirates season ticket holder, too. You have a special calling at baseball games, don't you?

JABS: That's right. I usually show up for the games about two hours in advance for batting practice. During batting practice, I catch the baseballs that are hit into the stands or players throw me balls and this year alone, I've caught 731 baseballs.


BERMAN: That is crazy. That is crazy. How many did you get last night?

JABS: Including two last night.


BERMAN: Those are going to be valuable. Game one --


JABS: This is a ground-rule double from the Red Sox that I snagged near the bull pen and this was thrown to me by one of the Cardinals pitchers in foul territory. So, I didn't go home empty handed from batting practice. I got two yesterday out of the collection.

ROMANS: That's cool.

BERMAN: What do you do with all of them? It's like 800 baseballs.

JABS: Right now, I still have every one that -- I'm almost at 3,000. They're all in my garage. I've got young kids, my daughter Libya and my son, EJ, and whenever they're old enough to hit field and throw, we've got a lifetime supply.


BERMAN: Erik, congratulations on the game. Congratulations on the balls. Great to have you here this morning. We really appreciate it.

ROMANS: Each one with a story. That's so cool.

BERMAN: he covets them. he --


ROMANS: Nice to meet you, Eric.

BERMAN: All right. We'll be right back.


ROMANS: If you only knew what happened when the commercials were playing. That's it for EARLY START.

BERMAN: It is time for "NEW DAY." Chris Cuomo and Kate Bolduan, it is all yours, friends.

KATE BOLDUAN, CNN CORRESPONDENT: Thanks, guys. Thanks for the -- happy way to start our show.


CHRIS CUOMO, CNN CORRESPONDENT: There's some very big and important stories going on right now, so let's get to it. Here's your top news.


JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We're not making excuses for the serious problems, but, you know, an element of this is the enormous demand.

CUOMO: Call to the carpet. This morning, Congressional hearings begin on the Affordable Care Act rollout. CNN learns new details about who knew what, when.

BOLDUAN: The big chill and early freeze slamming the eastern half of the country. It's already snowing in some parts. Even the south is bracing for the cold.

MICHAELA PEREIRA, CNN CORRESPONDENT: Dramatic turn in the case of Kennedy cousin, Michael Skakel, now granted a retrial in the murder of his 15-year-old neighbor nearly 40 years ago. Will he walk free?

CUOMO: Your "NEW DAY" starts right now.

ANNOUNCER: This is "NEW DAY" with Chris Cuomo, Kate Bolduan, and Michaela Pereira.

(END VIDEOTAPE) CUOMO: Good morning. Welcome to "NEW DAY." It's Thursday, October 24th, six o'clock in the east. A lot going on this morning, including the mystery in Massachusetts. Why did a 14-year-old student kill a popular young teacher? We have new video this morning of that teacher and new information on the investigation.

The entire city of Boston rocked by the turn of events here, even a moment of silence at last night's World Series game.

BOLDUAN: Plus, a powerful interview in our next hour, the story of Matthew Cordle in an online video confession he admitted to killing a man while driving drunk. And in a jailhouse interview, Cordle is talking to us on the first day of his 6 1/2-year sentence. Does he regret his confession? Does he feel his sentence is fair? All of that is coming up.

PEREIRA: And finally, we just have to show you this picture. It is not photoshop. It is a real play during a college football game. Notre Dame running back when he tackled, helmet gets knocked off. It's not hard to see why this picture is going viral. He's been called the ridiculously photogenic football player. I believe the words smoldering eyes may have been used on Twitter.