CNN NewsStand - 1999-05-04
Channel: malgent
Transcript
Language: English (original, YouTube automatic captions)
[0:00] sitting in for Bill Press on the right.
[0:02] I'm Robert Novak. Join us again next
[0:04] time for another edition of Crossfire.
[0:20] This is CNN news stand
[0:29] tonight. CNN and Fortune.
[0:34] >> Unbelievable.
[0:36] >> Tornadoes obliterating lives,
[0:38] neighborhoods, futures.
[0:40] >> It took everything. You know, I have no
[0:42] idea how many years it' take to to get
[0:45] back to where it was. When you have no
[0:48] assets and no collateral, how do you
[0:50] rebuild?
[0:51] >> We understand there are two communities
[0:53] at least that simply don't exist.
[0:55] >> From Oklahoma, Mike Fetcher has the
[0:57] questions you should ask and the answers
[0:59] you need to know if you're ever caught
[1:01] at ground zero.
[1:05] >> Amid the devastation, an army of
[1:08] insurance agents is on the move.
[1:10] >> What we do is we sell a promise and uh
[1:13] this is where we keep that promise. In
[1:15] Witchah, Kansas, James Sator follows a
[1:18] foot soldier into the heart of
[1:20] destruction.
[1:21] >> People are just glad to be alive and it
[1:23] makes I think people realize maybe what
[1:25] their priorities are all about.
[1:26] >> And from Zena, Ohio, Sharon Collins
[1:29] finds a ray of hope.
[1:30] >> We had phenomenal help from the
[1:32] government and from everybody involved.
[1:35] >> A town once devastated by tornadoes is
[1:38] now rebuilt and renewed.
[1:43] Whether it's getting out the warning,
[1:45] >> tornado on the ground, tornado on the
[1:47] ground.
[1:48] >> Part of our goal is to keep people ahead
[1:50] of the storm
[1:51] >> or getting close to the action.
[1:53] >> I picked up the camera and I started
[1:55] filming outside.
[1:56] >> There are some surprising businesses
[1:58] spun out of our fascination with
[1:59] tornadoes.
[2:00] >> It's incredible. It is huge.
[2:02] >> Follow us into a whirlwind of profits.
[2:08] >> The IPO heard round the world. Last
[2:12] year, I knew he was the most profitable
[2:13] privately owned company in America.
[2:15] >> A financial legend goes public. Goldman
[2:18] Sachs.
[2:19] >> The firm's culture and its partnership
[2:22] are what has set it apart from the rest
[2:23] of the industry to this point.
[2:24] >> Tonight, what created the Goldman
[2:27] standard. All that on CNN and Fortune.
[2:42] CNN and Fortune with Will Obey and
[2:45] Steven Frasier.
[2:52] Welcome to this special live edition of
[2:54] CNN and Fortune. I'm at the news stand
[2:57] at Borders Books in Los Angeles.
[3:00] >> And I'm live in Atlanta at Joe Mug's
[3:02] news stand. And on news stands anywhere
[3:05] tonight, headlines are about the
[3:07] devastating tornadoes in Oklahoma and
[3:09] Kansas. What do they have to do with
[3:11] business and finance? Everything, it
[3:13] turns out, even before the storm clouds
[3:15] clear, entire industries are mobilizing,
[3:18] getting ready to direct millions of
[3:19] dollars to the storm victims. So for
[3:22] much of our focus tonight will be on
[3:24] where the money comes from, who gets it,
[3:26] and what others did to start new lives
[3:28] after tragedy similar to this week's.
[3:32] 76 tornadoes struck all the way from
[3:34] Texas to South Dakota. 45 swept across
[3:37] Oklahoma alone. Nationwide, 44 people
[3:41] lost their lives and nearly 800 were
[3:43] injured, making this the deadliest
[3:45] single outbreak of tornadoes since 1985.
[3:49] The destruction is massive.
[3:54] In Oklahoma, at least 2,000 structures
[3:56] were damaged or destroyed.
[4:00] Officials say the tornado that hit
[4:01] Oklahoma City traveled as far as 80
[4:04] miles along the ground. Some storms cut
[4:07] a swath of devastation a quarter mile or
[4:09] half a mile wide. Insurance companies
[4:12] estimate the damages caused by the
[4:14] tornadoes may total at least half a
[4:16] billion dollars. It's one of the most
[4:19] destructive series of tornadoes in the
[4:21] nation's history.
[4:24] President Clinton has declared the
[4:25] damaged regions of Kansas and Oklahoma
[4:27] federal disaster areas. And that means
[4:30] relief money will soon begin to flow to
[4:32] tornado victims. But sometimes this
[4:34] money is just a temporary fix. And
[4:36] worse, it can even become an added
[4:38] burden. How's that? Here's Mike Bcher,
[4:42] just outside of Oklahoma City.
[4:46] After the injury came the insult. One
[4:49] day after a monster tornado ripped apart
[4:51] Mullhall, Oklahoma, population 199, wary
[4:55] residents keep a close eye on another
[4:57] severe storm moving towards town.
[5:02] Perry Patterson, the town's banker and
[5:04] former Mohal treasurer, will never
[5:07] forget the night of May 3rd, 1999. What
[5:10] do you remember about that night? What
[5:11] did you hear? What did it sound like?
[5:14] >> Oh, it sounded like several freight
[5:15] trains. You always hear the the story
[5:17] that a Fortnite sounded like a freight
[5:18] train. This was multiple freight trains.
[5:20] >> And you were against the safe in the
[5:21] bank.
[5:22] >> Yeah, I the vault door was locked with
[5:24] the time lock. So I uh got in the closet
[5:26] behind the vault and put my back against
[5:30] the vault wall. I figured that was the
[5:31] safest place in the building.
[5:32] >> Patterson counted the time it took for
[5:34] it to pass. 25 seconds. When it was
[5:37] over, one woman was killed in a nearby
[5:39] farmhouse and one man lost his arm.
[5:41] >> When I stepped into the street, the the
[5:44] debris was it was everywhere. The debris
[5:47] was in the in the streets as high as the
[5:49] buildings and it was it was uh
[5:52] unnervingly quiet. My first impression
[5:55] was that I was the last one left. They
[5:57] were all killed. I couldn't see how
[5:59] anyone could survive it.
[6:01] >> Tornadoes are a fickle phenomenon.
[6:03] Destroying entire buildings but leaving
[6:05] a computer sitting on a desk untouched.
[6:07] Demolishing Mullhall's recreation hall
[6:10] but skipping over the pool table.
[6:12] exploding a garage but sparing the
[6:14] town's volunteer fire department truck.
[6:16] 5 years ago, Mohal was named the second
[6:19] best small town in America. Now, it has
[6:22] become a federal disaster zone, a town
[6:24] that's going to need a lot of help,
[6:26] especially since most people in town
[6:28] don't carry insurance. We have a
[6:30] volunteer fire department, which uh
[6:33] raises the rates for homeowners
[6:35] insurance.
[6:37] So many of our residents are retired
[6:41] elderly on fixed income and the price of
[6:44] homeowners insurance is secondary to to
[6:47] food and groceries and paying the bills.
[6:51] >> Shane Estus is one of the uninsured and
[6:53] one of the homeless. He had just made
[6:56] the final payment on his house, owned it
[6:58] outright. Now this. He's the owner of
[7:01] nothing.
[7:02] >> You made your last payment?
[7:03] >> Yep. Dropped the insurance. Couldn't
[7:06] afford it. got rid of that. Now,
[7:09] now he ain't got a house now. It's just
[7:10] like starting all over from day one. You
[7:13] know,
[7:14] what can he say? What can he do? But
[7:16] Estus and others in town soon discover
[7:19] that they qualify for emergency federal
[7:21] disaster.
[7:22] >> Do you have insurance?
[7:24] >> The American Red Cross is deploying on
[7:26] foot, going doortodoor in Mullhall,
[7:28] determining the extent of damage to each
[7:30] house and telling the owners that they
[7:32] could qualify for federal aid. you need
[7:34] to go down at the office and and talk to
[7:36] them about there because there could be
[7:38] some help to to get your house back in
[7:40] livable.
[7:41] >> The Red Cross will report their damage
[7:43] assessments to the Federal Emergency
[7:45] Management Administration called FEMA,
[7:47] which will eventually decide how much
[7:49] help each person in Mullhall gets. In
[7:51] Shane's case, it will take a lot of
[7:53] money.
[7:54] >> Yet, you been in the house?
[7:55] >> No, I haven't been inside the residence,
[7:57] but we're just going through on the
[7:59] outside and seeing the damage. And a lot
[8:01] of it is so evident that you don't even
[8:02] have to go inside the house.
[8:04] >> Like most people in town, Shane's
[8:05] immediate need is a temporary place to
[8:07] live until he can rebuild. Mohal's
[8:10] uninsured homeless qualify for up to
[8:12] $10,000 in temporary housing benefits.
[8:15] The money is a grant, doesn't have to be
[8:17] paid back, and is dispersed in
[8:19] installments for a maximum of 18 months.
[8:23] During that time, Mullhall victims can
[8:25] apply for an Emergency Small Business
[8:27] Administration loan of up to $40,000 to
[8:30] replace personal property and up to
[8:33] $200,000 to repair or replace a home.
[8:36] Those who qualify can repay the note
[8:38] over 30 years at an interest rate of
[8:41] about 4%.
[8:42] >> Those who don't qualify can receive one
[8:45] final $13,600
[8:48] grant from FEMA.
[8:51] But what about a businessman like Phil
[8:53] Dasher whose tractor repair shop was
[8:55] demolished?
[8:56] >> It took everything.
[8:59] I mean, we're we're salvaging a lot, but
[9:03] uh it won't be the same. You know, I
[9:06] have no idea how many years it' take to
[9:09] to get back to where it was.
[9:11] >> Dasher can apply for an emergency
[9:13] lowinterest SBA loan of up to $1.5
[9:16] million if he doesn't qualify for a
[9:18] regular commercial loan. Although Desher
[9:20] figures he'll need about $120,000 to
[9:23] replace his building.
[9:24] >> I'm sure there's several businesses that
[9:26] won't rebuild, but uh I have intentions
[9:29] of it. I hope to to be able to. But
[9:33] towns like Mullhall are made up of much
[9:35] more than homes and businesses. There is
[9:37] the school, which was badly damaged, and
[9:40] the half million dollar water tower,
[9:42] which was knocked over like a bowling
[9:43] pin.
[9:46] More federal money will be needed and
[9:47] granted to repair and rebuild these
[9:49] important parts of Mullhol's
[9:50] infrastructure, especially since Mullhol
[9:53] takes in only about $1,500 in sales tax
[9:56] revenues each month.
[9:59] In other disasters, victims have
[10:01] complained that federal disaster help is
[10:03] too little and comes too late. Right
[10:05] now, Mullhall is still in a state of
[10:07] shock and doesn't want to consider those
[10:09] things. But one thing is intact, its
[10:12] will to rebuild. federal help or not.
[10:16] >> That's my home. That's my hometown. It's
[10:18] I ain't going nowhere. I ain't going I
[10:21] ain't going north, south, east, or west.
[10:23] I'm staying right where I'm at.
[10:31] Uninsured homeowners and businesses have
[10:33] been getting disaster loans from the
[10:34] Small Business Administration since
[10:36] 1953. All totaled more than 26 billion.
[10:40] And 90% of those loans have been paid
[10:42] back. The director of that loan program
[10:44] and all SBA disaster relief says this
[10:47] week's damage in Oklahoma and the other
[10:49] plane states is the worst he's seen
[10:51] during an 18-year career.
[10:56] The devastation in parts of Kansas and
[10:58] Oklahoma reaches for miles. Once the
[11:01] same was true in Zena, Ohio. In 1974,
[11:04] that town was destroyed in what remains
[11:07] one of the most violent outbreaks of
[11:09] tornadoes in US history. Today, Zena has
[11:12] recovered, but their struggle to rebuild
[11:15] was extremely difficult. As Sharon
[11:17] Collins reports, the memories are still
[11:19] as fresh as today's headlines.
[11:29] Zena, a name that comes from the Greek
[11:31] word for hospitality. It's a quiet
[11:34] little Midwest city where people still
[11:37] know their neighbors and they don't need
[11:39] daily traffic reports. It's never that
[11:41] bad. If you drove through here, you
[11:43] might think it would be a nice place to
[11:45] raise a family. Safe, tranquil, a slice
[11:49] of Americana.
[11:51] But on April 3rd, 1974, Vignia was
[11:54] turned upside down. It was in the center
[11:57] of what meteorologists call a super
[11:59] outbreak. That's when multiple tornadoes
[12:01] occur in an area at the same time. The
[12:04] one that hit Zena killed 33 people.
[12:07] 10,000 were left homeless. More than
[12:09] 1,400 buildings were destroyed or
[12:11] damaged. Before Oklahoma, it was ranked
[12:14] the seventh most costly tornado in US
[12:17] history.
[12:17] >> And I was just, you know, praying to the
[12:19] good Lord. I said, you let let my family
[12:21] be okay. And
[12:23] >> Claude Lions was a police lieutenant
[12:25] back then. As he sifted through the
[12:27] destruction, he had no idea if his
[12:30] family was alive.
[12:31] >> It was a terrible feeling till I found
[12:33] out about my family. I can't imagine
[12:35] what it would have been like if I'd
[12:36] found one of them dead. I I just, you
[12:38] know, imagine I can't imagine what that
[12:41] would be like.
[12:42] >> His home was in one of the worst hit
[12:44] areas, a subdivision called Arrowhead,
[12:47] where 75% of the homes were destroyed.
[12:50] Unlike most of us, people in this town
[12:53] really understand how the folks in
[12:55] Oklahoma might feel. What is it about
[12:59] life after a tornado that will never
[13:01] >> Many people 25 years ago still haven't
[13:04] gotten over the terror of the tornado
[13:06] and they have the sirens that ring every
[13:08] the first Monday of every month and I
[13:11] wish they didn't sometimes because I
[13:13] think it keeps the people stirred up and
[13:14] maybe it wouldn't. This thing is going
[13:16] to bring back a lot of memories and it
[13:18] won't bring back the good memories.
[13:20] It'll bring back the bad memories.
[13:23] >> Bill Ikeman's clock is still frozen in
[13:26] time. that that was the um that was the
[13:29] time the the power went off. So that was
[13:31] >> it was 4:42. Ordinarily all the
[13:34] businesses would have been full of
[13:36] customers which may have meant even more
[13:38] deaths but in those days everyone closed
[13:40] on Wednesday afternoons so a lot of
[13:42] people were home. I was frying chicken.
[13:45] I had the nicest big skill full of
[13:47] chicken breast.
[13:48] >> Keith and Joanne sitters were among
[13:50] those who lost their homes. He said,
[13:52] "Head for the basement." And I just had
[13:54] enough time to stick my head out the
[13:56] door and I saw it coming over the high
[13:58] school.
[13:59] >> The sitters were lucky. Their home was
[14:01] well insured. Joanne worked for an
[14:04] insurance agent.
[14:05] >> Well, we say uh if you never need it,
[14:09] you're lucky. But the time that you know
[14:12] whether it's any good is when you have a
[14:14] loss. Of course, I worked with John and
[14:16] we had people that come in that were
[14:18] underinsured and so they learned a
[14:21] lesson from that.
[14:22] >> According to the Insurance Information
[14:24] Institute, it's a common mistake. As
[14:27] property values go up, homeowners often
[14:29] fail to increase their premiums. Lions
[14:32] is one of those who's glad he did.
[14:34] >> I don't mind telling you, when I bought
[14:35] this house, I paid $12,000 for it.
[14:38] >> Wow. What year was that?
[14:39] >> That was 1966. I paid $12,000 for it. I
[14:42] think my last insurance bill they had on
[14:43] a thing was like $112,000.
[14:46] >> As Zena began to rebuild, there were
[14:48] other problems.
[14:49] >> We actually put a moratorium on
[14:52] rebuilding in certain areas of the city
[14:54] for several months so we could take some
[14:57] time and look at it and say, is this the
[15:00] zoning that we still want for this
[15:01] particular area? There were zoning
[15:04] changes which made a lot of people
[15:05] unhappy. Some businesses were told they
[15:08] couldn't rebuild in the same location.
[15:10] Some neighborhoods became commercial
[15:12] districts. It all took a lot of time and
[15:15] patience
[15:16] >> where things should be located where I
[15:18] mean uh where the junior high where I
[15:20] went to junior high was completely
[15:22] destroyed. And so that was a decision
[15:25] was made and it's now a senior citizen
[15:27] center. A new building was built. Uh
[15:30] where I went to high school that was
[15:32] destroyed and that's where junior high
[15:34] went. So those are major major decisions
[15:37] that were made at that time. After the
[15:40] tornado, more than 2,000 people were at
[15:43] least temporarily out of jobs because
[15:45] the industries they worked for were
[15:47] damaged or destroyed. And one of the
[15:49] toughest things facing a community is
[15:51] the fact that some companies do not
[15:53] rebuild. This used to be the site of
[15:56] Zena's largest employer, a furniture
[15:58] manufacturing company. It had 250
[16:01] workers, but instead of rebuilding, it
[16:03] moved to another town. We lost a lot of
[16:06] the population when the tornado came
[16:07] through because there's a lot of people
[16:08] said, "I'm not going to build rebuild
[16:09] there because I'm afraid another tornado
[16:11] would come along." And we kind of took
[16:12] the the attitude, you know, if you're
[16:14] going to live in the Midwest, there's
[16:15] going to be tornadoes. I don't think you
[16:17] can hide from them. So, you said, "Well,
[16:19] it's kind of like lightning. Hope it
[16:21] won't strike in the same place twice."
[16:23] >> But a lot more stayed. They rebuilt
[16:25] their homes, their businesses, their
[16:28] community. It's a different town now. A
[16:30] lot of landmarks are gone. Neighborhoods
[16:33] have changed. And in many homes, there
[16:35] is a much greater respect for the things
[16:38] that really count.
[16:41] >> The 1974 tornado in Zena, Ohio was part
[16:44] of a storm system that produced 148
[16:47] tornadoes, cutting across 11 states,
[16:50] killing more than 300 people and causing
[16:53] what today would total $1.3 billion in
[16:56] damage. We'll be right back.
[16:59] Still ahead,
[17:01] >> making money by predicting and
[17:04] preventing disaster.
[17:05] >> We will have more tornadoes in Oklahoma.
[17:08] And the station that can provide the
[17:11] best information as to when those
[17:12] tornadoes will occur, that's the station
[17:14] that's going to come out on top.
[17:24] Newsstand, CNN and Fortune is brought to
[17:28] you by the document company Xerox. Keep
[17:31] the conversation going. Share the
[17:33] knowledge.
[17:36] >> What's wrong with Alex?
[17:37] >> Alex, why so blue? I wish I was blue.
[17:42] Everything here is so colorless. I need
[17:44] color to express myself.
[17:46] >> Spoken like a true business
[17:48] professional.
[17:49] >> I am. I mean, I did.
[17:51] >> Sure you did. Every business needs
[17:54] color. Helps them communicate what they
[17:56] know.
[17:57] >> So why can't we have some?
[17:59] >> Because they need it more down there.
[18:06] >> See, keep it in color. You make the
[18:07] point. It gets results. But color is so
[18:11] hard to get and it takes an eternity.
[18:13] Not when you can get Xerox color on the
[18:15] desktop
[18:15] >> or put it right in the hall.
[18:17] >> You can even get it at 40 pages a
[18:20] minute.
[18:21] Guess they really do need it. But
[18:24] couldn't I just wear this?
[18:27] >> Maybe on casual Fridays. Keep the
[18:30] conversation going. Share the knowledge.
[18:32] The digital document company. Xerox.
[18:35] >> Well, I I've decided tonight's the night
[18:37] I'm going to pop the question.
[18:39] >> So, did you get the ring yet?
[18:41] >> No. I had a better idea. I wanted to get
[18:44] her something that says I'm really in
[18:46] this for the long hall.
[18:51] It's a train.
[18:53] >> What? I'm making a commitment here.
[18:55] >> Call toll-free 187799 train for a free
[18:59] train home comfort guide and learn how
[19:01] to choose the right air conditioning and
[19:03] heating system for your home.
[19:10] Posted pop-up notes pop up one at a time
[19:14] from the new dispenser.
[19:17] Now you'll always know where your
[19:18] post-it notes are
[19:22] so you won't go nuts looking for nuts.
[19:29] Posted pop-up notes. What did you ever
[19:32] do without them? Another 3M Innovation.
[19:36] We now return to CNN and Fortune with
[19:39] Willow Bay.
[19:43] As we've seen, many of the people in
[19:45] Oklahoma's small towns didn't have
[19:47] insurance. But luckily, thousands of
[19:50] others did. Insurance companies
[19:52] mobilized special catastrophe teams,
[19:54] sending hundreds of claims adjusters
[19:56] into the devastated areas. Checks are
[19:59] being cut on the spot for policy holders
[20:01] who have seen their lives literally
[20:03] blown away. From Witchah, Kansas, here's
[20:06] James Hattorii. The storm's toll here in
[20:09] the Witchah area. Five dead, dozens
[20:11] injured, 8,000 buildings damaged in
[20:14] Sedick County, and thousands still
[20:16] without power. This morning, 2 days
[20:18] after a series of tornadoes roared
[20:20] through Kansas,
[20:21] >> they lost everything. Their trailers are
[20:23] gone.
[20:26] >> This is what remains of a residential
[20:28] area stretching more than 10 miles along
[20:30] Senica Street in South Witchah.
[20:32] >> First tornado up here. This is the
[20:34] tornado responsible for the devastation
[20:37] captured on home video. Weather
[20:39] officials classify it as having been at
[20:40] F4 strength with winds up to 260 m hour.
[20:45] It left at least five people dead in
[20:47] Witchah and suburban Hazesville.
[20:53] Kansas, like Oklahoma and Texas, lies
[20:55] along tornado alley. So severe storms
[20:58] are not uncommon, but the destruction
[21:00] here is among the worst ever. While the
[21:03] human toll, including two people killed
[21:05] at this Witchah trailer park, is
[21:07] certainly the most tragic loss, the
[21:09] financial losses are simply staggering.
[21:11] According to industry figures, over the
[21:13] last decade, insurance claims from
[21:15] windstorm, hail storms, and tornadoes
[21:18] totaled $1.2 billion for Kansas and
[21:20] Oklahoma alone. This week's storms could
[21:23] easily add another $1.5 billion.
[21:26] >> This was the dining area.
[21:29] And there, I mean, it's just
[21:31] everything's just gone.
[21:35] >> Ruthie Hosner's home is among the
[21:37] casualties. She bought it as an
[21:38] investment for her children using
[21:40] insurance money from her husband's death
[21:42] 18 months ago.
[21:43] >> I asked earlier today, why me? And I was
[21:46] told, "Why not you, you know, and to
[21:48] deal with it and be grateful that we're
[21:50] all okay and nobody was hurt or killed?
[21:52] It's a house and it can be rebuilt."
[21:54] >> Hosner wasn't inside when the tornado
[21:56] passed. Her tenants, Martin Stevens and
[21:58] Mark Groover, took cover in a basement
[22:01] across the street.
[22:02] >> I could see debris flying by by the back
[22:04] door. That stuff sounded well, like he
[22:07] said, described the other day, sounded
[22:09] like about 300 people outside beating on
[22:11] the house with baseball bats.
[22:12] >> This is my home, you know. It's it's
[22:16] what mine and my children's future was
[22:17] about. And it's just in a heartbeat,
[22:20] it's just gone.
[22:21] >> Hner's home is a total loss, but it was
[22:24] insured. You can see where it uh has
[22:26] just totally there's just waved and the
[22:29] windows are out here. Um the top plate
[22:32] on the uh roof is gone.
[22:35] >> Steve Parrot, an adjuster for State Farm
[22:37] Insurance, was on the scene yesterday
[22:39] afternoon.
[22:40] >> I've seen a lot of wind damage. I've
[22:41] seen some tornadoes where maybe a
[22:43] farmhouse or two have been hit, but
[22:45] nothing like this where a whole metro
[22:46] area has been basically demolished in
[22:50] in, you know, in a what 40 50 block
[22:52] area. After determining Hosner's home
[22:55] wasn't worth salvaging, Parent agreed to
[22:57] pay her full replacement value plus gave
[23:00] her $10,000 right on the spot.
[23:03] >> You come in and you write a check for
[23:05] the whole thing, property, the I mean
[23:07] like as if you were buying the house.
[23:08] >> Well, in this case, we did because we it
[23:10] was not salvageable. It was it would
[23:12] cost more to repair it. It had been
[23:14] condemned. It would cost more to repair
[23:15] it than to replace it. Um, we'll be
[23:17] working with her on personal property
[23:19] and trying to get a list of that
[23:20] together, but we at least gave her some
[23:21] money there to go ahead and get her
[23:23] immediate needs met, clothing, food,
[23:25] shelter, that sort of thing.
[23:27] >> Wayne Stewart is managing claims for
[23:29] State Farm. He's heading a team which
[23:30] will total 75 adjusters in the Witchah
[23:33] area.
[23:34] >> How do you determine who needs them the
[23:36] most attention among all these people
[23:38] who are seeing damage?
[23:40] >> Well, in some cases, we do it by driving
[23:41] up and down the streets and simply
[23:42] asking people, are you insured with
[23:44] State Farm? And if we see one that's bad
[23:45] and we find out that that's the case,
[23:47] then we'll stop and we'll assist those
[23:48] people.
[23:48] >> For now, Hosner and her two children are
[23:51] staying at a local motel.
[23:53] >> Yes, ma'am. Um I'm wanting to know if
[23:55] you guys do um like bulldozing. My home
[23:58] was hit by the tornado.
[24:00] >> Although the insurance company has
[24:01] agreed to pay for rebuilding, she still
[24:03] has to clear away all the debris.
[24:06] >> It's a total loss and I'm trying to find
[24:08] somebody to come in and take down the
[24:10] rest of the structural walls that are
[24:11] left and to help me clean off the lot.
[24:13] The city is holding 15% of the insurance
[24:15] money back as a deposit to make sure
[24:18] property owners don't simply abandon
[24:19] their homes. Ruthie Hosner has taken the
[24:22] first step. The demolition crew arrives
[24:25] tomorrow.
[24:26] >> I really didn't think much about
[24:27] insurance until a year and a half ago
[24:29] and and it it opens your eyes, you know,
[24:31] when you have a devastation like that.
[24:35] >> State Farm Insurance Fire and Casualty
[24:37] Company is the biggest home insurance
[24:39] provider in the country. It ensures one
[24:41] out of every four homes in Kansas and
[24:44] Oklahoma.
[24:59] >> I'm an engineer, an architect,
[25:01] >> a CEO who needed to have
[25:03] >> notebook computers preloaded with a
[25:05] powerful, easy to use, reliable business
[25:08] operating system. So I called Dell. Dell
[25:11] pre-installed Windows NT workstation on
[25:13] customuilt latitude notebooks.
[25:15] >> Dell pioneered this direct way of
[25:17] providing solutions,
[25:19] >> which is good. It's genius.
[25:22] Redirect Dell. Dell notebooks use Intel
[25:24] Pentium 2 processors.
[25:29] >> Cars aren't the only products that make
[25:30] the Michigan economy cook.
[25:33] >> 24 tax cuts in the last 6 years has
[25:36] Michigan businesses sitting very
[25:37] comfortably.
[25:40] Site Selection Magazine has diagnosed us
[25:42] number one in the US for attracting new
[25:44] business growth.
[25:46] The networking's great.
[25:48] >> Call 1800 9466829
[25:51] for information about Michigan's great
[25:53] location.
[25:53] >> Today, it's not enough to be just
[25:55] computer smart. You've also got to be
[25:57] state smart.
[26:00] >> What is about something?
[26:06] Whatever may come, the world keeps
[26:09] revolving.
[26:12] They say the next big thing is here,
[26:15] that the reolution's near, but to me it
[26:20] seems quite clear that it's all just a
[26:23] little bit of history repeating.
[26:28] >> Oh, come on. You can't stay another day.
[26:32] >> There he is.
[26:32] >> I wish I could. I'm just so crazy with
[26:34] the new job. I don't have time to figure
[26:35] out my finances. We went through the
[26:37] same thing when we got this house. And
[26:38] with the new baby coming, we needed
[26:40] help.
[26:42] >> So, what did you guys do? Called T- Roll
[26:43] Price. Really? It was great. It really
[26:45] helped simplify things. Give him a call.
[26:47] >> Okay, I will.
[26:48] >> What are Big Brothers for, right?
[26:50] >> Come on, get out of there. You
[26:52] >> go. Bye.
[26:54] >> Troll Price helping people invest with
[26:56] confidence for over 60 years.
[26:59] >> Tornadoes ripped the heartland.
[27:01] >> Thank God we were saved. I feel sorry
[27:03] for all those people who lost
[27:05] everything.
[27:06] >> Tragedy in Colorado. Crisis in Kosovo.
[27:10] Wherever breaking news happens, CNN is
[27:12] there. Live with correspondents on the
[27:15] scene reporting the latest developments.
[27:17] Then recap all the day dramatic events
[27:20] with instant special reports. Your most
[27:22] reliable source for global coverage is
[27:25] CNN, the world's news leader.
[27:34] When we return, for TV stations on the
[27:37] planes, tracking severe storms better
[27:39] than the competition is part of
[27:40] business, a costly part. Prices of
[27:43] high-end weather technology have reached
[27:45] the stratosphere. TV meteorologist Rick
[27:48] Mitchell.
[27:49] >> It's in the neighborhood of three to
[27:51] $400,000.
[27:53] How many employees is that? But we have
[27:54] to have Doppler radar. There's no if and
[27:56] buts about it. I mean, they'll cut staff
[27:58] before they cut the Doppler radar.
[28:02] >> It's a stone tower with really nothing
[28:05] flashy about it at all. No fancy art, no
[28:09] expensive, you know, Chinese rug. I
[28:12] mean, it really is it's it's very
[28:13] discreet and very um pedestrian almost.
[28:15] >> And the message is what we're we're
[28:17] serious about business, not about
[28:18] >> we make money, the firm makes money, but
[28:21] don't you go spending it and and chose
[28:22] some flashy lifestyle and and attract a
[28:25] lot of attention because of it.
[28:31] Stock market was mixed today with
[28:32] pharmaceutical companies up 18.
[28:36] >> Something's going on.
[28:38] >> You guys invested.
[28:40] >> Can you get us some peanuts or
[28:41] something? You ever used that discover
[28:43] brokerage online?
[28:46] >> In other news, bartender Jack McGee
[28:48] purchased a Pins Company in a deal worth
[28:50] 43 billion.
[28:53] bartending, but we'll keep
[28:55] >> no charge for the night empire.
[29:02] >> Of all the stories you've come to know,
[29:06] the most important by far is your own.
[29:09] With no other story, you care so much
[29:12] about how it turns out. Are you just
[29:15] waiting to see, or are you writing it
[29:18] the way you want it to go? At Jefferson
[29:21] Pilot Financial, we're doing more than
[29:23] providing financial services.
[29:26] We're helping you write the story of
[29:28] your life.
[29:31] >> All right, listen up. Coach's plane is
[29:33] stuck in Idaho.
[29:34] >> But since it's our first bowl game,
[29:37] >> coach,
[29:40] >> get in there and hit somebody now.
[29:45] Somebody get him.
[29:49] They didn't come to play today.
[29:50] >> First down.
[29:51] >> Presenting video conferencing. Do
[29:53] >> I have to go in there AND DO IT FOR YOU?
[29:54] >> Because sometimes it's not just what you
[29:56] say, but how you say it.
[29:59] >> Kinkos. Express yourself.
[30:01] >> Thursday. She's using her name to stand
[30:04] up for Afghan women. CNN and
[30:06] Entertainment Weekly at a new time.
[30:08] Thursday 87 central on CNN.
[30:12] >> In 28 years, Oliger Travel Homes has
[30:14] never had this large a selection of
[30:15] diesel pushers. Choose from Numar's
[30:17] Mountain Air, Dutch Star, and Country
[30:19] Star. Featuring the exclusive flush
[30:21] floor superlides, ducted air
[30:23] conditioning, and unparalleled Amish
[30:25] construction. Only Newar comes standard
[30:27] with the large 8.3 L 300 horsepower
[30:30] diesel. For the same price, get more
[30:32] power, more quality, more value.
[30:34] Remember, Olger Travel Homes is more
[30:36] than low prices. Oliger Travel Homes is
[30:42] >> Come a running. It's the season to make
[30:43] a splash and celebrate. It's halalibet
[30:46] season at McGrath's Fish House. And that
[30:48] means something special's cooking. The
[30:50] Alaskan halibet platter with Halibet
[30:53] fish and chips and McGrath's specialty,
[30:55] Halibet Parmesan. Served with fresh
[30:57] garden salad and hot sourdough bread.
[30:59] All for just $8.99. Enjoy the very best
[31:02] of Halibet season now before the sun
[31:04] sets on the season. The Halibet platter,
[31:07] just $8.99 at McGrath's Fish House.
[31:13] Ross Perau on Larry King Live tonight.
[31:18] Now back to CNN and Fortune with Willow
[31:21] Bay and Steven Frasier.
[31:24] Money swirls around a disaster area in
[31:27] ways obvious, such as cash for
[31:29] rebuilding and ways obscure, such as
[31:32] industries based on the threat of a
[31:34] storm. For example, rain or shine,
[31:36] millions of dollars are spent on
[31:38] technology for detecting tornadoes and
[31:40] for sounding the alarm. Even though we
[31:43] pull away, show you some of the damage
[31:45] and some of the reports as to what's
[31:46] been happening. Real quick before we go
[31:48] back to Jennifer, let's show First Alert
[31:50] Doppler radar just one more time. At the
[31:52] heart of life in Oklahoma City,
[31:53] >> there was the first explosion. There
[31:55] >> is the weather.
[31:56] >> This monster is about to cross the road.
[31:58] >> One moment, there are homes. There, a
[32:00] second later, absolutely nothing.
[32:03] There's an old saying about uh weather
[32:05] and that is that every day the lead
[32:06] story is weather unless something else
[32:08] comes along. Uh it's it's that important
[32:10] to people. There's nothing else that
[32:11] just touches so many people every single
[32:14] day.
[32:14] >> For TV stations on the planes, tracking
[32:16] severe storms better than the
[32:17] competition is part of business. A
[32:19] costly part. Prices of high-end weather
[32:22] technology have reached the
[32:23] stratosphere. TV meteorologist Rick
[32:26] Mitchell.
[32:27] >> It's in the neighborhood of three to
[32:29] $400,000.
[32:31] How many employees is that? But we have
[32:33] to have Doppler radar. There's no if
[32:34] ands buts about it. I mean, they'll cut
[32:36] staff before they cut the Doppler radar.
[32:38] >> In a recent study of viewers in the top
[32:40] 20 television markets, 92% said they
[32:43] tune into their local weather before any
[32:46] other local news, even breaking news.
[32:48] >> The weather business is driven by
[32:50] technology. And if you don't have the
[32:52] technology, uh especially in a city like
[32:55] Oklahoma City where you need to cover
[32:56] the weather to win the news, uh if you
[32:59] don't have it, you're not going to win.
[33:03] And one corporate giant is doing just
[33:05] that. Last year, Loheed Martin invested
[33:07] an estimated $820 million to update the
[33:11] National Weather Services NEXRAD radar
[33:13] system. Here's how it works. A sensor in
[33:15] the ground bounces a beam of energy off
[33:18] of raindrops and collects information
[33:20] about wind and atmospheric pressure
[33:21] among other indicators. That data is
[33:24] sent through a modem to four hubs that
[33:26] process the information and then onto
[33:28] subscribers who see maps and symbols.
[33:30] There are more than a hundred sensors.
[33:32] Each covers a circular area with a 200
[33:35] mile radius. Lesie Lemon worked on the
[33:37] Lockheed project.
[33:39] >> Based on cost, based on quality of of of
[33:42] the technology produced by the company,
[33:45] Loheed Martin won the the procurement.
[33:48] >> Lemon says the project has prompted many
[33:50] local weather departments to join the
[33:52] high technology age.
[33:53] >> This technology is extremely important
[33:57] because it gives the the uh the
[33:59] meteorologists the ability to monitor
[34:02] short-term changes
[34:04] >> and the ability to be number one. KCO's
[34:06] Rick Mitchell was one of the first to
[34:08] break the news of the tornadoes.
[34:10] >> You know, we had this huge tornado move
[34:12] through the area. We live in tornado
[34:14] alley. Just because it happened two days
[34:17] ago doesn't mean it can't happen again.
[34:19] We will have more tornadoes in Oklahoma.
[34:21] More lives will be threatened. and the
[34:24] station that can provide the best
[34:26] information as to when those tornadoes
[34:27] will occur, uh, where they're headed.
[34:30] That's the station that's going to come
[34:31] out on top.
[34:34] >> Technology helping people get away from
[34:36] danger. Then, in stark contrast to that
[34:38] impulse are businesses that are growing
[34:40] by catering to thrillsekers, promising
[34:43] to put tourists as close as they can get
[34:45] to harm's way. For years, Charles
[34:48] Edwards has run a business called
[34:50] Cloud9. And for $2,000 a person, Edwards
[34:53] offers vacationers two weeks of driving
[34:56] around the Midwest in pursuit of
[34:57] twisters.
[35:02] This is a night worth thousands of
[35:03] dollars to tornado chasers. There's so
[35:06] much unknown about storms and about
[35:08] weather.
[35:09] >> Charles Edwards has been in this growth
[35:10] industry longer than anyone else, 4
[35:13] years.
[35:14] >> The computer here tells me exactly where
[35:15] I am at all locations. I can zoom in to
[35:17] get great detail. Edwards, a former
[35:20] computer network technician, advertises
[35:22] his Cloud9 tours on the internet and has
[35:24] to turn customers away. The weather
[35:27] junkies can't say no.
[35:28] >> You know, a lot of people might look at
[35:29] this as uh, you know, how can you be
[35:32] taking advantage of, you know, people's
[35:33] misery with the tornadoes, but the fact
[35:37] is the tornadoes are going to be there
[35:39] whether we're there or not.
[35:41] >> Tornado number four. Every storm is
[35:44] different.
[35:45] I've even seen some video that kind of
[35:48] looks like a graceful dancer just
[35:49] dancing along.
[35:50] >> Cloud9 is Edward's full-time job now.
[35:53] >> Yes, everybody gets a t-shirt uh with
[35:55] the tour. Uh they can buy extras if they
[35:57] want them for for gifts.
[35:59] >> For two weeks, he takes 30 customers on
[36:01] a non-stop tour through the Midwest,
[36:03] searching for tornadoes. He requires a
[36:06] waiver in case of death.
[36:08] >> People think I'm crazy, but a lot of
[36:09] people I think are also a little bit
[36:11] jealous that I'm doing this. Uh, we have
[36:13] a scanner, 2 meter radio, CB for car to
[36:17] car communication.
[36:18] >> Edwards is outfitted with expensive
[36:20] tracking gear to find the big ones which
[36:22] he was chasing two days ago.
[36:26] >> For me, it's been good business. It's
[36:27] kind of mixed emotions there, but uh the
[36:30] way I see it is I couldn't prevent the
[36:32] tornadoes. In fact, I was able to uh
[36:35] spot and report the tornadoes where they
[36:37] were and possibly save some lives. He
[36:39] doesn't make a fortune at Cloud9, but
[36:41] this small-time entrepreneur is happy in
[36:44] a dangerous trade.
[36:46] >> I'm not going to make get rich off of
[36:48] doing the tours, but uh the way I
[36:50] figured I'm I'm big success because I
[36:53] found a way to make a living at what I
[36:55] love to do.
[36:59] >> Cloud9's 1999 tour season starts in two
[37:02] weeks. It is sold out every place on
[37:05] every trip for the entire season.
[37:08] Tornadoes have always fascinated us.
[37:11] Whether it's the horror of their real
[37:12] life devastation or wonder at the havoc
[37:15] they wreak on the big screen. Remember
[37:17] the tornado in the Wizard of Oz? It was
[37:19] really just dust and cloth. Nearly 60
[37:22] years later, the tornadoes in the movie
[37:24] Twister were much more frightening. We
[37:26] wondered how close to reality
[37:28] Hollywood's technicians are getting. So,
[37:30] here's Bruce Birkhart.
[37:32] >> Bill, ground speed isn't creeping. Get
[37:35] ahead of it as fast as you can or he's
[37:36] going to bury you.
[37:41] The movie Twister, Steven Spielberg's
[37:44] blockbuster summertime hit of a few
[37:46] years back. The film portrays a team of
[37:48] scientists trying to go where no man or
[37:51] woman has gone before.
[37:55] >> I think this is where they're trying to
[37:57] >> get their instrument in the instrument
[37:59] right into the front.
[38:01] >> Dr. James St. John, atmospheric
[38:03] scientists at Georgia Tech, helped us
[38:05] separate fact from fiction.
[38:07] >> Scientists have been studying tornadoes
[38:09] forever, but still nobody knows how a
[38:11] tornado works. We have no idea what is
[38:14] going on inside because nobody's ever
[38:15] been able to take scientific
[38:17] measurements from inside the funnel.
[38:19] >> Is it true?
[38:21] >> We don't know exactly uh the what causes
[38:24] the tornado to form, but we do know
[38:27] what's going on. There's low pressure
[38:29] inside the tornado which creates the
[38:31] vortex to spin up
[38:38] >> cow.
[38:39] >> So if I'm driving in my truck and a cow
[38:41] flies over my windshield, chances are
[38:44] >> you're you're in deep trouble that that
[38:46] I'd be airborne, too.
[38:47] >> Yeah, you you would probably be
[38:48] airborne, too. Chances are pretty slim.
[38:51] If the wind's strong enough to pick up a
[38:53] cow and and blow it by, it's probably
[38:54] going to push your car or your truck in
[38:57] this case off into the ditch. Oh, there
[38:59] are there are many uh cases where they
[39:02] found cattle, you know, miles away from
[39:05] where they originally were. Usually
[39:06] they're dead by the impact. Uh there are
[39:09] stories of fish being sucked up from
[39:12] ponds into uh into thunderstorms by
[39:15] tornadoes and then falling fish several
[39:18] miles away.
[39:21] Whether it's Hollywood's version or the
[39:23] real thing, the goal of science is to
[39:25] gather enough data to somehow make the
[39:28] unpredictable predictable. We've
[39:30] actually gotten pretty good at defining,
[39:32] you know, these box areas where they're
[39:34] likely to occur. When we put out a
[39:36] tornado, a watch, they're doing a pretty
[39:39] good job of that right now. But as far
[39:41] as saying, okay, within this box, 3
[39:43] hours from now, a tornado is going to
[39:45] occur in Fulton County, Georgia, we're
[39:48] we're not there yet. and I don't foresee
[39:50] it in my lifetime.
[39:54] >> But next, step into one of Wall Street's
[39:57] Toniest offices.
[39:59] >> No fancy art, no expensive, you know,
[40:02] Chinese rugs. I mean, it really is it's
[40:04] it's very discreet.
[40:05] >> Go behind the Goldman Sachs legend when
[40:08] CNN and Fortune continues.
[40:22] People. People. Today's agenda. The
[40:25] information age.
[40:26] >> What happened to the industrial age?
[40:27] >> No more living in the past. Today it's
[40:29] what you know that matters. Look,
[40:31] >> he's got half a good idea over there.
[40:33] She's got the other half.
[40:34] >> We get the picture.
[40:35] >> What are we supposed to do about it?
[40:37] >> Make it simpler for people to exchange
[40:39] ideas.
[40:39] >> You'll need it at all
[40:40] >> with new software.
[40:42] >> Relax. I've got a subartner down there.
[40:45] >> But they only make
[40:46] >> Not anymore. They don't.
[40:48] >> Keep the conversation going. Share the
[40:49] knowledge. The digital document company,
[40:51] Xerox.
[41:14] Singapore Airlines new first class.
[41:18] Now more than ever, a great way to fly.
[41:22] Xerox uses the internet to share
[41:24] knowledge through documents.
[41:28] Barnes &oble.com uses it to share
[41:31] literary ideas.
[41:34] The Hawaii Visitors and Convention
[41:35] Bureau uses it to share a little piece
[41:37] of paradise.
[41:40] They all share the same internet service
[41:42] provider, PSIET. For thousands of
[41:45] businesses worldwide, the internet
[41:48] starts here.
[41:52] >> Michael, I say, Michael, would you like
[41:54] to hear a bird call?
[41:56] >> Sure, Farhorn. With MCI, a bird can call
[42:00] for just five I say 5 cents a minute
[42:02] every Sunday and 10 cents a minute all
[42:05] week long. Now that my friend is a
[42:08] beautiful bird call
[42:10] >> the bird I say the bird thinks he's a
[42:12] comedian.
[42:13] >> Now stop stealing my material.
[42:16] >> Call I say call 1800 Sundays to sign up.
[42:19] >> Don't get me riled.
[42:22] News, CNN's prime time news magazine
[42:25] series, five nights a week at 8 Eastern.
[42:28] CNN and Time, hard-hitting issues.
[42:32] People profile, celebrating 25 years of
[42:35] People magazine. CNN and Fortune, the
[42:38] dynamic world of business.
[42:40] CNN and Entertainment Weekly. Showbiz
[42:43] trends and pop culture. Agree. CNN News,
[42:47] 8 Eastern, 5 nights a week on CNN.
[42:53] Welcome back to CNN and Fortune with
[42:56] Willow Bay.
[42:58] >> From the headlines in the plain states
[43:00] to the headlines on Wall Street, here's
[43:02] our special in-depth stock of the week.
[43:05] This week, the investment bank Goldman
[43:06] Sachs went public in what became the
[43:09] second largest initial public offering
[43:11] of stock ever. The IPO seemed like a
[43:13] sure bet for easy profits. So, we made
[43:16] Goldman Sachs our stock of the week.
[43:21] The Goldman Suits were on hand to ring
[43:24] the opening bell Tuesday. Their company
[43:26] was issuing 69 million shares of stock
[43:29] and could have found buyers for at least
[43:32] 600 million shares. From its initial
[43:35] price of $53 a share, Goldman's stock
[43:38] shot to more than 77, a gain of 46%.
[43:42] Then it settled back to near 70.
[43:45] Goldman's made nearly $3.7 billion from
[43:48] this sale and says it wants to use the
[43:50] money for strategic acquisitions. We
[43:54] wondered who might they buy. The buzz on
[43:57] Wall Street is that Goldman's going to
[43:58] go for a large retail mutual fund.
[44:00] They're going to go for a Fidelity. But
[44:02] what I'm hearing from sources inside
[44:04] Goldman is that they're actually going
[44:05] to look for something a lot smaller than
[44:06] that and something that has a lot more
[44:08] institutional and high net worth assets
[44:10] associated with it.
[44:16] Goldman Sachs lost a dollar and a
[44:18] quarter a share today, closing at 69 and
[44:20] a half. But all of the excitement about
[44:22] the IPO made it a perfect time to pay a
[44:25] visit to Lisa Endick in London. She's a
[44:27] former Goldman vice president and author
[44:29] of the recent book Goldman Sachs, the
[44:32] culture of success. Last week, James
[44:34] Atoutorii spoke with her about Goldman's
[44:36] history and this very private company's
[44:39] motivation for going public.
[44:47] Last year I knew it was the most
[44:48] profitable privately owned company in
[44:50] America. And this includes Levi Strauss,
[44:52] the United Parcel Service. This includes
[44:54] household names. Goldman Sachs is more
[44:56] profitable than any of them.
[44:57] >> It's that kind of success that's made
[44:59] Goldman Sachs a Wall Street legend.
[45:02] >> Being a partner of Goldman Sachs is the
[45:04] highest accolade on Wall Street. It is
[45:06] something people aspire to. It has
[45:07] allowed Goldman Sachs to recruit and
[45:10] maintain the very best people in the
[45:12] industry because there is nothing else
[45:13] like it.
[45:14] >> Nothing else like it because Goldman was
[45:16] Wall Street's last great partnership
[45:18] producing superstars like analyst Abby
[45:21] Joseph Cohen. Partners who owned the
[45:23] firm and had no obligation to
[45:25] shareholders, the press, or other
[45:27] outsiders. That freedom allowed Goldman
[45:30] a culture of privacy, even secrecy that
[45:33] many believe was critical to its
[45:35] success. A culture reflected even in
[45:37] Goldman's discrete New York
[45:39] headquarters. No sign, just an address.
[45:42] >> It's a stone tower with really nothing
[45:45] flashy about it at all. No fancy art, no
[45:49] expensive, you know, Chinese rugs. I
[45:52] mean, it really is it's it's very
[45:53] discreet and very um pedestrian almost.
[45:55] >> And the message is what? We're serious
[45:57] about business, not about
[45:58] >> business. We make money, the firm makes
[46:00] money, but don't you go spending it and
[46:02] and chose some flashy lifestyle and and
[46:04] attract a lot of attention because of
[46:06] it.
[46:06] >> It's a philosophy started in 1869 when
[46:09] Marcus Goldman, a German immigrant,
[46:12] opened a short-term lending firm on New
[46:14] York's Pine Street. Two decades later,
[46:16] he invited his son-in-law, Samuel Saxs,
[46:18] to join the company, and Goldman Sachs
[46:21] was born. The family firm got its first
[46:24] big break in 1906. a public offering for
[46:27] a cousin's mail order business, Sears
[46:30] Robbuk. Until then, buying stock meant
[46:33] companies with physical assets like
[46:35] steel and railroads, which could be
[46:36] liquidated. But Goldman taught investors
[46:39] a new way of valuing companies based on
[46:42] cash flow.
[46:43] >> This is a major shift in thinking of the
[46:46] stock market.
[46:46] >> Huge. Huge. It changed Goldman Sachs's
[46:49] ability to underwrite and everyone else
[46:50] on Wall Street's ability to underwrite
[46:52] companies that did not have major
[46:54] physical assets. With that innovation,
[46:56] Goldman Sachs became a top Wall Street
[46:58] firm
[46:59] until the crash of 1929 when its highly
[47:02] leveraged investment trust collapsed. It
[47:05] dropped 99% of its value or $300
[47:08] million, a loss equivalent to $3 billion
[47:12] today. It nearly killed Goldman Sachs.
[47:15] >> It had no customers for the next 5
[47:17] years. It made no money for 15 years. I
[47:20] mean, it's almost unthinkable in today's
[47:22] terms that an investment bank could
[47:24] exist for 15 years without making any
[47:26] money, but they did. In fact,
[47:28] >> the company spent decades on the long
[47:31] road to recovery.
[47:32] >> The Ford Thunderbird for 1956.
[47:36] >> Then in 1956, Goldman scored a huge
[47:39] coup, convincing the Ford Motor Company
[47:41] to go public. It was one of the biggest
[47:44] initial stock offerings ever. $650
[47:47] million worth. an issue that would be
[47:49] worth nearly$4 billion dollars today.
[47:52] >> Goldman again took Wall Street into new
[47:55] territory when a trader named Gus Levy
[47:58] devised block trading. For the first
[48:00] time, Goldman brokered sales of millions
[48:02] of shares in an instant transaction.
[48:05] Levy took the reigns at Goldman in 1969
[48:08] and set out to hire aggressive young
[48:10] traders like himself.
[48:12] >> Early in the morning before school
[48:13] started, he would have high school
[48:14] seniors come in to the trading floor and
[48:17] play cards with him. poker,
[48:18] >> poker, um, bridge, any sort of game
[48:21] where there's strategy involved, where
[48:23] there was remembering the cards, where
[48:25] he could watch people's mind and see how
[48:27] they thought and see how analytical they
[48:29] were. And um, those who were good
[48:31] players got hired as traders.
[48:32] >> In the 1970s, Goldman took its next big
[48:35] gamble, going global.
[48:37] >> The move into international markets was
[48:39] hardly risk-free. The cost of setting up
[48:41] shop overseas were formidable. Plus,
[48:43] financial centers like London weren't
[48:45] exactly eager to begin sharing business
[48:47] with US banks. Still, the decision to go
[48:50] global proved pivotal for Goldman Sachs,
[48:52] transforming it from a great American
[48:54] bank into a worldwide powerhouse.
[48:58] >> Goldman Sachs is the number one banker
[48:59] in London in many businesses, number one
[49:01] banker in Europe in many businesses, and
[49:03] has really gone into China quite
[49:06] heavily. The efforts in China paid off
[49:08] when Goldman took the state-owned
[49:09] telephone company public. A record-
[49:11] setting deal worth nearly $4 billion. At
[49:14] the top of its underwriting game,
[49:16] Goldman forged a new, less certain
[49:18] business led, ironically, by the point
[49:21] man for US economic policy. Today,
[49:23] Treasury Secretary Robert Rubin,
[49:26] previously as co-chairman at Goldman,
[49:28] Rubin pushed the firm into risk
[49:30] arbitrage, using sophisticated analysis
[49:32] to bet the company's own assets on
[49:34] high-risk trades.
[49:36] >> Bob spearheaded some of the more risky
[49:37] trading businesses, the proprietary
[49:39] trading businesses in which the firm did
[49:41] so well in the 1980s and the 1990s. Um,
[49:44] so both of those brought a lot more risk
[49:45] to Goldman Sachs and with it an enormous
[49:48] jump in profitability. It fueled
[49:50] phenomenal growth at Goldman during the
[49:52] 1980s and made the partners incredibly
[49:55] rich, boosting their capital more than
[49:57] tenfold from $200 million in 1980 to 2.4
[50:02] billion in 1990. But there were damaging
[50:05] setbacks, too. In 1987, partner Robert
[50:09] Freeman was arrested and later pleaded
[50:11] guilty to insider trading. In 1995,
[50:14] Goldman paid out a4 billion dollars to
[50:17] settle lawsuits stemming from business
[50:19] dealings with the late British media
[50:20] tycoon Robert Maxwell. Though the firm
[50:23] denied any guilt,
[50:25] >> Goldman Sachs's name got dragged through
[50:26] the mud in this. Goldman Sachs was
[50:28] written about in almost every major news
[50:30] publication in the negative light
[50:31] because of their involvement with Robert
[50:33] Maxwell.
[50:34] >> Then in 1994, perhaps the biggest
[50:36] setback when Goldman lost hundreds of
[50:38] millions of dollars on bad trades. A
[50:41] third of the partners quit, taking a
[50:43] third of the firm's capital with them.
[50:45] An event so traumatic it seemed
[50:47] inevitable the days of Goldman's
[50:49] cherished partnership were numbered.
[50:52] >> I believe that the turmoil of 1994
[50:55] scarred the firm in such a way that it
[50:57] believed it needed a steady source of
[50:59] capital, permanent capital, that
[51:01] something like 1994 should never happen
[51:03] again. And the way to keep something
[51:04] like that from ever happening again, one
[51:06] of the ways was to take permanent
[51:08] capital from public shareholders.
[51:11] Just about all of Goldman's 13,000
[51:13] employees, from the senior partners down
[51:15] to the receptionists and janitors are
[51:18] sharing the wealth from the IPO. They
[51:20] received shares based on their annual
[51:22] salary and seniority. The employees
[51:25] stake can range in value from around
[51:27] $10,000 to nearly 200 million. Feel like
[51:30] you've been working for the wrong
[51:31] company? We'll be right back.
[51:41] >> Here in America, home means different
[51:43] things to different people. But we're
[51:46] pretty much agreed on what it means to
[51:47] own a home. It has something to do with
[51:50] stronger communities, safer streets,
[51:53] better schools, and the hopes and dreams
[51:56] that America was built on.
[51:59] So, whatever home means, one thing's
[52:01] certain. It's a lot more than just four
[52:03] walls and a roof. For a free guide that
[52:07] can help you on the path to home
[52:08] ownership, call the Fanny May
[52:10] Foundation.
[52:12] >> Michael,
[52:13] >> hi.
[52:14] >> Oh, may a little extra.
[52:16] >> I guess you heard Barber was
[52:17] >> visiting Kadia College. First year, huh?
[52:20] How's mad?
[52:21] >> Made the deans list.
[52:22] >> Great. I know our Josh is only in third
[52:25] grade, but I don't know how you guys
[52:26] did. It put him through school and all.
[52:27] We invested with Troll Price. Really?
[52:29] >> Yeah. And they helped us figure out how
[52:31] much to put away. They've got this
[52:32] college planning kit.
[52:34] >> On my way to my mom's anyway.
[52:36] >> Hey. Hey.
[52:36] >> Troll Price. Helping people invest with
[52:39] confidence for over 60 years.
[52:42] >> Love knows no boundaries, sees no
[52:45] distances. You can miss a loved one
[52:47] across the ocean as much as a loved one
[52:50] across the way. Now call them both with
[52:53] up to 30 minutes free every month for
[52:56] life. Switch to Sprint now for a world
[52:59] created around you. A world where you
[53:01] can call Canada, Western Europe, and
[53:04] Australia for up to 30 minutes free
[53:06] every month for life. Get low
[53:09] international rates for a low monthly
[53:11] fee and domestic calls for just a dime a
[53:14] minute.
[53:16] Call Sprint now
[53:18] 1877832-6353
[53:22] for low international rates domestic
[53:24] calls for a dime a minute and get up to
[53:26] 30 minutes of calls to Canada, Western
[53:29] Europe and Australia every month for
[53:31] free for life and watch distances
[53:34] disappear. Isn't that the point of
[53:36] contact? Call 18778326353.
[53:50] That's all for tonight. Next Wednesday,
[53:53] he gave up a high-flying career with
[53:55] Delta Airlines for the fortunes of war.
[53:58] We follow Care's chief financial officer
[54:01] into the refugee camps of Albania. Join
[54:03] us next Wednesday at 8 Eastern.
[54:06] >> Tomorrow at 8 Eastern, chasing tornadoes
[54:08] from behind a lens. We look at the
[54:10] media's appetite for amateur pictures of
[54:12] disasters in the making. Join Jud Rose
[54:15] and me for CNN and Entertainment Weekly.
[54:17] I'm Willow Bay in Los Angeles.
[54:21] I'm Steven Frasier in Atlanta. We'll see
[54:23] you next week. And remember, this is our
[54:25] time from now on 8 Eastern. Good night
[54:28] from the news stand.
[54:39] Heat.
[55:04] Heat.
[55:06] Heat.
[55:19] Heat.
[55:52] To purchase a transcript of this
[55:53] program, please call 1800 CNN news.
[55:57] Visit us at cnn.com/newsstand.
[56:01] Join Fortune online at fortune.com.
[56:05] On the newsstand now, how to win big on
[56:07] the net. Fortune asks Amazon.com's Jeff
[56:10] Bezos and other ECEOs for their secrets
[56:14] of success.
[56:25] Every day you face issues that are full
[56:28] of risk. But today you have three issues
[56:30] that are absolutely risk-f free. They
[56:33] are the three risk-free issues of
[56:35] Fortune magazine offered exclusively to
[56:37] you as a CNN Fortune viewer. Call now
[56:40] for your free trial issues packed with
[56:42] information to help you get ahead
[56:44] professionally, financially, and
[56:46] personally. This no risk offer is
[56:49] exclusively for CNN Fortune viewers. So
[56:51] call now for your risk-free issues.
[57:26] I'm an engineer, an architect,
[57:28] >> a CEO who needed
[57:29] >> had to have
[57:30] >> notebook computers preloaded with a
[57:32] powerful, easy to use, reliable business
[57:35] operating system. So I call Dell. Dell
[57:38] pre-installed Windows NT workstation on
[57:40] customuilt latitude notebooks.
[57:42] >> Dell pioneered this direct way of
[57:44] providing solutions, which is good. It's
[57:47] genius.
[57:49] Be direct. Dell Dell notebooks use Intel
[57:51] Pentium 2 processors.
[57:56] >> Close captioning provided by 1800 US
[57:59] search. Locate a longlost friend or a
[58:01] family member. Who do you want to find?
[58:03] Find anyone. 1800usarch.com.
[58:06] Tonight on Larry King Live, Ross Perau
[58:08] will be the guest for the hour, taking
[58:10] your calls. Tonight, 9 Eastern on CNN.
[58:15] The road doesn't know if it's bumpy or
[58:19] rainy or icy. But Bravvada knows
[58:23] road stupid.
[58:26] Bravvada smart
[58:28] >> speak.
[58:29] >> Start outing the road with Bravvada
[58:31] smart track. It automatically adjusts to
[58:34] changing road conditions with no buttons
[58:36] or levers. Once again, road stupid.
[58:39] Bravvada smart. Bravado by Oldmobile.
[58:44] Start something.
[58:46] >> Every morning I have a different
[58:47] routine. I go see different clients. I
[58:49] drive roughly 75 m a day. When I
[58:51] suggested to my wife Alexis, she said,
[58:52] "What are you crazy?" I said, "Honey,
[58:55] listen. We need a dependable car for
[58:56] Luigi." The warranty has made me very
[58:59] confident. I've got a whole history of
[59:01] terrible cars. I would park it down the
[59:03] street because I