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Malaysian Airlines Plane Still Missing; Wall Street Bonuses Back to Pre-Financial Crisis Levels; New Information Emerges about Missing Malaysian Plane; Larry Summers Talks About American Infrastructure and Education
Aired March 15, 2014 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
POPPY HARLOW, CNN ANCHOR: A plane is missing. Relatives of passengers are desperately waiting for news of their loved ones, and the global aviation industry worth billions is also looking for answers. I'm Poppy Harlow in this week for Christine Romans. This is "YOUR MONEY."
One week ago exactly, Malaysia Airlines flight 370 disappeared and the mystery of what happened to that Boeing 777 is sharpening the focus on the business of flying. The modern jet is likely the most complicated global mobile product you'll ever sit in. It has the ability to transform economies and erase borders. With a price tag starting at $261 million, the Boeing 777 has 3 million parts provided by 500 different suppliers all around the world. That is the global economy at work.
And while the Boeing 777 has one of the safest records in the industry, Boeing stock still took a hit this week. Most analysts say long term, whatever happened to this flight won't hurt Boeing's business. Why not? Because countries and companies want these planes. For emerging economies like Malaysia a fleet of shiny aircraft and a sparkling airport is a foothold in the modern economy. Just this week, India's fourth biggest airline confirmed an order for 42 Boeing 737s worth more than $4 billion. In Beijing, Dubai, Bangkok, international visitors find state-of-the-art airports.
But when a flight disappears into thin air, how these nations respond means everything. Ross Aimer, CEO of Aero Consulting Experts, also a retired captain for United Airlines, talk to me about if this happened elsewhere, let's say the United States, do you think the process would be significantly different?
ROSS AIMER, CEO, AERO CONSULTING EXPERTS: It would be, absolutely. Anytime you have a multi-national effort on doing something, there are some limitations and someone will step on somebody's toes, duplicate things. You can't get all the information in. I think this has to be concentrated, not necessarily United States, by one country, and then obviously have global help from everybody else. But just like any other major project, you need one captain in a cockpit.
HARLOW: We asked Sir Richard Branson who has run three airlines over 30 years, what he thought, how a plane could just disappear like this. And I want you to listen to what he said.
(BEGIN VIDEO CLIP)
RICHARD BRANSON, CHAIRMAN, VIRGIN GROUP: Obviously, you know, there was some kind of catastrophic failure, I believe, and, you know -- and I'm hopeful they'll find out what it was. And every time that something like this happens, on the rare occasions it happens, you know, airlines need to learn from it to make sure it doesn't happen again. And, you know -- and it's very rare that the same thing happens twice.
(END VIDEO CLIP)
HARLOW: Absolutely lessons will be learned -- 3 million parts on the Boeing 777 from all around the globe. Boeing won't get more specific on where the parts are from. But you've talked about this, right? Tell us how much of the current technology in commercial aviation today has resulted from mistakes, accidents of the past?
AIMER: I would say perhaps a majority. Every time there is an incident or accident, a major one, there's improvements to the safety. In the industry, they learn from it and they improve the product. Aviation is the forefront of these improvements. We've learned from all of our mistakes, previous crashes. And I agree with Mr. Branson that this needs to be another lesson to all of us.
Whatever happens, the outcome is, although I personally hope for a major failure of this airplane. I don't want to look into some other scenarios. That scares me.
HARLOW: Do you expect long-term this is going to impact Malaysia airlines as a business, from what you've seen in the past?
AIMER: I hope not. No. The good thing is that people forget. And airlines have tricks up their sleeve. All you have to do is lower your fares for a while after something like that, and people will come back, especially if they don't have too many alternatives. Malaysia is not like the United States where you have multiple major airlines. If one goes out of business, others could fill the void. So I think they will survive this, whatever the outcome is, but obviously, they're going to be affected.
HARLOW: Ross Aimer, Aero Consulting Experts, appreciate you coming in today. Thank you.
AIMER: It was my pleasure.
HARLOW: The search for flight 370 covers thousands of miles, nearly 100 ships and planes from a dozen countries are searching day and night for any sign of this Boeing 777. But people like you are also helping, thanks to some cutting-edge technology. Anna Cabrera joins us from Denver where the latest movement from crowd sourcing is adding a lot of eyes to this search. Tell us about it.
ANA CABRERA, CNN CORRESPONDENT: Hi, Poppy. Certainly this mystery captivated the world, leading to what one crowd sourcing company called their biggest campaign ever. In fact, we're told millions of people are logging on to their computers to help look for clues.
CABRERA: Joe Francica in Huntsville, Alabama is on a mission.
JOE FRANCICA, SEARCHING IMAGES FOR MISSING PLANE: There is an awful lot of ground to cover.
CABRERA: He's one of many around the world crowd sourcing, using satellite snapshots to search for ma Malaysia Airlines flight 370.
We're looking perhaps over an ocean.
FRANCICA: Yes, that's my interpretation.
CABRERA: We searched with him through his computer, joining what organizers say are more than 2 million volunteers poring over the digital images looking for a trace of the vanished flight.
FRANCICA: It's important for families to know that people are helping in the search.
CABRERA: It can be an arduous task. Sometimes there's not much to see.
FRANCICA: Today's images are not like this.
CABRERA: Crowd sources on social media are sharing what they've seen -- maybe a raft, what appear to be wings.
FRANCICA: You never know what's going to pop up.
CABRERA: The search area has been divided into small sections. Each picture or tile represents 250 square meters, roughly 10 city blocks. The key is if you see anything, wreckage, a raft, an oil slick or an object, you flag it.
UNIDENTIFIED MALE: This is a real needle in a haystack problem.
CABRERA: Digital Globe, which launched the crowd sourcing campaign on Monday, said every pixel has had eyes ton at least 30 time. So far more than 745,000 features have tagged. Right now experts are working to determine if those tags are real clues.
FRANCICA: I have not seen anything of any particular, you know, interest at this point. So we'll just keep searches.
CABRERA: Francica has looked at the equivalent of about 4,000 city blocks himself and refuses to give up.
CABRERA: Now, Digital Globe tells us the most commonly tagged object that they've seen so far has been ships or boats that are actually involved in the search. Remember, this is such a huge people have to look at there's such an overwhelming number of people looking that this is still a developing operation. So they're still collecting images and still analyzing what people have tagged. Poppy?
HARLOW: Absolutely. You know, it's interesting, when you look at crowd sourcing used in way like this, this is actually not that uncommon, right? It's been used after natural disaster, aiding in federal investigations.
CABRERA: Absolutely. So we're seeing all kinds of scenarios where technology is really coming in very useful. For example, the typhoon that happened in the Philippines back in November, typhoon Haiyan, was so devastating that crowd sourcing helped to identify within 24 hours some 60,000 objects of interest that helped aid in the recovery and response effort there. Even in the Boston bombing we saw investigators use crowd sourcing to help identify the suspects. They collected all these different images from the public and they were able to use algorithms that zeroed in or highlighted the Tsarnaev brothers. Poppy?
HARLOW: Let's hope in this case it helps. Ana, thank you, great report, appreciate it.
Two men on missing flight 370 were traveling with stolen passports. That may have nothing to do with the plane's disappearance, but just how big it the black market for stolen and forged passports?
(BEGIN VIDEO CLIP)
TONY SALES, CONVICTED FORGER: There's a huge black market for stolen passports. It's absolutely huge. It is probably on a daily basis an average fraudster buys five or six.
(END VIDEO CLIP)
CABRERA: A convicted forger tells us more, straight ahead.
HARLOW: Two men onboard flight 370 were traveling with stolen passports. And that might not have had anything to do with the disappearance of the plane, but they represent a big problem -- black market passports. I want to bring in Zane Asher. You talked with a convicted forger, right, someone who did this.
ZAIN ASHER, CNN CORRESPONDENT: I did.
HARLOW: Someone who did it for a living and is now teaching companies how to spot it.
ASHER: Exactly. He says that, you know, possible forgery is relatively easy. He started when he was in his 20s. He would take apart lost and stolen passports and practiced ripping them apart and putting them back together. Back in the day, for a true masterpiece, top quality fake passport, he would charge between $8,000 and $10,000. (BEGIN VIDEO CLIP)
SALES: It can take weeks to make a passport. It can take few hours, depending on the quality of passport that the forger's actually making.
ASHER: Tony Sales spent 15 years forging passports in the U.K. before being sent to prison in 2009.
SALES: By gently picking the edge of a passport and now you can start to peel the passport back.
ASHER: Here he is changing the name on this passport to mine.
SALES: Anything can be faked. Someone actually made this passport. That means it can be repeated again. You can see how close through to the picture we actually are here.
ASHER: According to Interpol, approximately 40 million passports have been reported stolen since 2002, some of them sold illegally to people who look similar enough to the original bearer.
GIDEON EPSTEIN, FORMER DOCUMENT EXAMINER: Even if you look agent little bit like that person, that's good enough.
ASHER: Others end up in the hands of counterfeiters.
SALES: There's a huge black market for stolen passports. It is absolutely huge. Probably on a daily basis, an average fraudster buys five or six.
ASHER: Forensic document examiner Gideon Epstein says a counterfeit passport is more likely to raise red flags at airport security than a stolen one because many countries have implemented taskforce security features to prevent alteration. For example, the first page of the U.S. passport contains an image of an eagle with 13 arrows, while a fake passport might have just 11 or 12. And watch as the letters USA change color under ultraviolet light.
BRENDA SPRAGUE, HEAD OF PASSPORT SERVICE, U.S. STATE DEPARTMENT: We are working to introduce a next generation passport with additional forensic features. But no matter how good you are, somebody's always trying to beat the system.
ASHER: Especially when it comes to threat. Not every country regularly checks Interpol's database to see if a passport is stolen. Two men on the Malaysia Airlines flight 370 were allowed to board with passports reported stolen in 12012 and 2013. One solution, passports like these that contain a microchip of biographic data designed to prevent them from being used by the wrong person.
SPRAGUE: Border security officials around the world can read that data and validate that you are who you say you are.
ASHER: But many countries, particularly in the developing world, are still behind on implementing them. SALES: We've seen a lot of the new electronic passports come in that have made definitely forging a passport much more difficult. But, of course, every system has its weaknesses.
ASHER: And Tony got out of jail in 2010. He now wants to educate companies on all types of fraud forging passports. But the most important thing, if you notice someone else's passport is lost, it is so important that you report it right away.
HARLOW: The most valuable thing when traveling. Fascinating. He said, someone made this, so someone can make it again. Fascinating report. Thank you.
ASHER: Of course.
HARLOW: Coming up on YOUR MONEY from rundown, U.S. airports, to crumbling schools, one of the top economic minds in this country says now is the time to fix it.
(BEGIN VIDEO CLIP)
LARRY SUMMERS, FORMER TREASURY SECRETARY: Ask yourself this -- should any American be proud of Kennedy Airport?
(END VIDEO CLIP)
HARLOW: That's Larry Summers. Hear what he says is working in America and what's not.
HARLOW: U.S. companies are building industry leading planes lie the Boeing 777 but some U.S. airports are flying in and out of are anything but impressive. Larry Summers thinks it's time to fix that. He server as treasury secretary under President Clinton, was a key member of President Obama's economic team during the financial crisis. He was also president of Harvard University when a dropout name Mark Zuckerberg was just another college kid. If there is a great money challenge of our time, Larry Summers has proposed a solution. So our Christine Romans asked him why the country isn't doing to improve its infrastructure and create jobs at the same time?
(BEGIN VIDEO CLIP)
SUMMERS: Should any American were proud of Kennedy airport, compared to the airports that people fly to in other countries? And I ask you, if a moment when we can borrow money for the long term in a currency we print well below three percent, and when the construction unemployment rate is near double digits, if that is not the moment to repair Kennedy airport, when will that moment ever come?
We tell our kids that science and the technology education is the most important thing, but across America kids get sick because the ventilation system in their chemistry lab no longer works. We tell our younger children that there's nothing more important than their education, but what do we show them when there's paint chipping off the walls as there are in more than 10,000 schools?
(END VIDEO CLIP)
HARLOW: And the country that has the best infrastructure and the best workforce will lead the 21st century and we're falling behind on both. How to ensure our work force can compete globally? A big part of that is providing the best education for our students. Larry Summers says that might mean, like it or not, a long are school day. Here's more of his conversation with Christine.
CHRISTINE ROMANS, CNN ANCHOR: You tweeted recently that the battle for America's future will be won or lost in public schools. Vie a question. I have a question -- are longer school days the way to narrow the gap between rich and poor in America's schools?
SUMMERS: There's no one silver bullet, but that's got to be a part. When kids go home to empty houses at 1:30, that is not the way to be prepared for the challenges of the 21st century. You know, you look at studies that sociologists have done, and you see that the number of enrichment hours, being read to, going to a museum, being coached or trained, that the kids of the affluent receive is almost 6,000 hours more than the kids of the less -- kids of the less fortunate, and that's got to be something that perpetuates inequality of opportunity. So if question have a longer, enriched school day. That will make an enormous difference.
ROMANS: The key is the enrichment part of it, the enriched school day, because I asked a principal of a school in Chicago about this, a principal that stars in our series "Chicagoland" that we're airing. She said a longer school day is great unless you don't have quality teachers and it's not a safe environment. The enrichment part is key, not just more hours.
SUMMERS: Absolutely. I've been enormously honored to become the chairman of an organization known at Citizen Schools that provides exactly those kinds of enriched extended days. Some of it is corps of volunteers under AmeriCorps. Some of it is citizens coming in and talking to kids about what it is that they do in building various kinds of hands-on experiments, for experiments and activities for kids to do. You know, you can light a fire if you do the right thing under any kid.
(END VIDEO CLIP)
HARLOW: All right, now, from Main Street to Wall Street where bonuses are getting better and better. The average amount of this year's check, stunning. What could that cash buy? Next.
HARLOW: Bankers having seen bonuses like this since before the 2008 crisis. The average bonus on Wall Street in 2013 up 15 percent to, get this, $164,000 dollars. That's one bonus check. All right, here's what 164 grand could buy you. What a flashy car? How about three? You could buy three Chevy Corvettes. Or you want something more practical? How about a house? And $164,000 could easily buy you a house in Nashville, Tucson, or Las Vegas.
And if you're planning for the future, send two kids a four-year public university all costs included, and you'll still have some money left over for grad school with just one Wall Street bonus check.
For more stories that matter to YOUR MONEY give me 60 seconds on the clock. It's "Money Time."
HARLOW: A major GM recall being investigated by Congress and the Justice Department. None of the affected cars have been fixed yet, because there aren't enough parts. GM has sent letters to owners of 1.4 million vehicles, but they haven't been told when to bring their cars to dealerships. Electric carmaker Tesla tangling with New Jersey. The state's motor vehicle commission saying says Tesla must stop selling cars directly to the public and use dealerships instead. Tesla is fighting that decision.
Some shoppers don't trust Target. The chain saw a 22 percent drop in foot traffic at its stores following its massive holiday hack. Paying more for crime, Amazon's premium service will now cost $99, up from $79. Customers still get all the same perks including free two-day shipping. It's the first price hike in Amazon Prime's nine year history.
Fannie Mae and Freddie Mac are back. Shares in the two companies plunged this week after reports of a bipartisan bill aiming to close both of them. Lawmakers say a draft of legislation is coming soon.
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HARLOW: Thanks for spending your Saturday smart with YOUR MONEY. Have a great weekend, everyone. CNN NEWSROOM starts right now.