tv CBS Evening News With Scott Pelley CBS May 14, 2012 5:30pm-6:00pm PDT
coming up next >> the latest news and weather are always o >> pelley: tonight, shakeup at america's biggest bank. j.p. morgan chase ousts a top executive after the $2 billion investment debacle. are more shoes about to drop? anthony mason has the latest. they protect the rest of us from crime, but now bob orr tells us more cops are becoming victims. how the other half lives. jim axelrod on the 50% of recent college grads struggling to find jobs. and two wonders of aerospace. >> at first off you don't think it's possible. >> pelley: chip reid with the story behind the space shuttle and its closest friend on earth. captioning sponsored by cbs this is the "cbs evening news" with scott pelley. >> pelley: good evening, heads are rolling in a wall street
debacle of the kind that few expected to see again so soon. stock in the nation's largest bank-- j.p. morgan chase-- continued to fall today. it has lost $19 billion in value since friday, more than 12% of its total worth. late last week, the bank shocked investors with a $2 billion loss in its trading department. j.p. morgan chase had made enormous bets on what are known as derivatives, an exotic wall street investment that was at the heart of the financial collapse in 2008. by this morning, a top executive was out and anthony mason picks up the story from there. >> reporter: the first casualty of the bank's $2 billion blunder was its chief investment officer, ina drew, a 30-year veteran of j.p. morgan chase and one of the highest ranking women on wall street resigned this morning.
drew oversaw the division responsible for the $2 billion loss. the bank stock tumbled another 3% today and c.e.o. jamie dimon has been rushing to do damage control. >> in hindsight we took far too much risk, the strategy we had was badly vetted, it was badly monitored, it should never have happened. >> reporter: but the bad trades are still active and the bank is still racking up losses, which could reach another billion dollars or more says michael greenberger, an expert on the derivatives and former federal regulator. >> it's almost as if you bet the new york yankees are going to win the world series and now that you see they're in the last place in the american league east you want to get out of the bet. the person you bet with is not going to let you out and that's the position they're in. >> reporter: at the same time, dimon is also doing damage control on his own reputation. >> not only was he the golden boy of wall street, but he was leading a very effective charge to undo dodd-frank. >> reporter: dodd-frank is the federal law designed to prevent another financial crisis.
under dimon, j.p. morgan chase has spent more than $21 million the past three years on lobbying the most of any bank, much of it spent to water down those new regulations. records of federal reserve meetings show that as recently as this february, a team of j.p. morgan chase executives-- including ina drew-- lobbied the fed staff about dodd-frank's so- called volcker rule which would prevent banks from making speculative bets. they urged the rule be modified. drew is not expected to be the only casualty at j.p. morgan chase, at least two traders are expected to get the ax as well and c.e.o. jamie dimon will undoubtedly face some angry shareholders at the bank's annual meeting tomorrow. >> pelley: anthony, let's be clear. j.p. morgan chase is not in danger. >> no, $2 billion is a lot of money, scott, but this is the biggest bank in the country by assets. they have a $2.3 trillion asset sheet.
>> pelley: jamie dimon is one of the most respected bankers in the country. if this can happen to him, what does that tell you? >> reporter: this suggests, scott, that the bank may not... it's too big to fail, we know that, but it may also be too big to manage, and there are increasing calls for these big banks to be broken up. that has risen again. >> pelley: thank you, anthony. anthony mentioned dodd-frank, that's the financial market reform law that passed in 2010. the federal government now has the authority to break up failing banks, but the rule that would ban risky trades doesn't go into effect until 2014. the economy is the top issue in the presidential race, and tonight a cbs news/"new york times" poll finds that the race is very tight. six months before the election, mitt romney leads president obama among registered voters 46% to 43%. but that three-point difference is within the poll's margin of error. americans are a little bit more
optimistic, it seems. two out of three voters, 67%, told us they believe the economy is bad. but have a look at this, back in september only 12% said the economy was improving. now three times as many, 36%, say it's getting better. president obama was the commencement speaker today at barnard college, the women's college in new york. >> while opportunities for women have grown exponentially over the last 30 years, as young people, in many ways, you have it even tougher than we did. this recession has been more brutal, the job losses steeper. >> pelley: and that is why today half of recent college graduates can't find full-time jobs. we asked jim axelrod to look into that for us. >> reporter: jihan forbes got good grades and a degree two years ago. the only thing she didn't get: a full-time job.
>> they said it was going to... "get a degree and you'll get a job. you're going to be a step ahead of everybody." and that really hasn't been the case. >> reporter: the 23-year-old wants to break into the fashion industry, so she's blogging as a paid intern at one web site and working part time at another. >> i've sent out hundreds of resumes, at least 300 in the past few years. >> reporter: you're smiling, i imagine there's times you want to scream. >> i mean, i have my breakdowns but, like, i can't, like, stress myself out about it because that's not going to go anything but give me wrinkles and this face cannot have wrinkles before it's 60. >> reporter: forbes majored in english, but a recent study found employers most likely to hire graduates with engineering, business, accounting, or computer science degrees. another study by rutgers university found more than a quarter of recent grads say their jobs have been working below the level of their education, the same percentage that have moved in with their parents to save money.
so you have a roof over your head. >> my parents' roof, but a roof. >> reporter: the median salary for recession-era graduates in their first job is $27,000, about $3,000 less than those who graduated before the recession began. between the internship and her part-time job, forbes makes $300 a week. >> that's just the hardest thing. >> reporter: you'd like to be making more money. >> of course. i would love to have full-time salary, benefits, all that wonderful stuff. >> reporter: forbes tells us she believes eventually this breaks will go her way and she'll do well but in the rutgers study only about half of recent grads, 48%, scott, believe they will do better financially than their parents. >> pelley: jim, thanks very much. undergraduates are also feeling the financial fallout of the great recession, in states including california. governor jerry brown revealed today that california's budget is in a lot more trouble than we knew. and we asked ben tracy to show us what that means.
>> reporter: jana bell soto is halfway through college at the university of california, irvine. he's worried he won't be able to finish. tuition went up 14% this school year because of state budget cuts. >> my mom already told my little brother he's going to have to go into the military so they can pay for his college. >> reporter: the u.c. system plans to raise tuition another 6% in july to nearly $13,000. that's more than double what students paid just five years ago because the state keeps cutting education funding. >> we're going to have to cut deeper, but cutting alone really doesn't do it. >> reporter: today governor jerry brown said the state's budget deficit jumped from $9 billion to $16 billion, largely because tax revenues have been much lower than expected. the unemployment rate here is still 11%. >> there has to be a balance and day of reckoning. this is the type of day of reckoning and we've got to take the medicine. >> reporter: so the governor announced $4 billion in new cuts, including a 5% pay cut for
state workers. he wants to shrink their work week to four nine and a half hour days to save on building operating costs. payments to those who care for the disabled would be cut and the university system would lose another $38 billion. brown even asked reporters for their ideas. >> if one of you guys can think of something better, i'll be glad to... i'll read your story tomorrow and if it passes the smell test, we might even incorporate it. >> reporter: governor brown says taxes must be raised. he wants a sales tax increase of a quarter of a cent and higher income taxes on people making more than $250,000. by california law, voters will decide whether to approve it. if they don't, brown says there will be more cuts totaling $6 billion. and those cuts would again hit education hard. the governor warned today that the school year here in california could shrink by up to three weeks and, scott, tuition at colleges and universities would continue to rise. >> pelley: so, ben, the plan is that the voters would vote on these tax increases in november.
how realistic is it to think that people will vote for the tax increase? >> well, that's an awfully tough sell but the governor is giving it his best go. he's running a campaign and leveling with taxpayers and saying you want to decide what kind of state you want to live in and if you want these things you have to pay for them. >> pelley: it's not just california. 29 states and the district of chropl columbia are bleeding red ink. leading the list are illinois, texas, massachusetts, and louisiana. moving on now to public safety. thousands of police officers will be in washington this week to honor those who've lost their lives in the line of duty. today the f.b.i. released figures for 2011, showing a disturbing increase in attacks on law enforcement officers. we asked justice correspondent bob orr to look into it. >> reporter: his name is among
the most recent etched in the granite of the national law enforcement officer's memorial. dariek crouse was shot and killed last september during a routine traffic stop. crouse was one of 72 officers killed across america in what was an awful year for police deaths. the first gunshots of 2011 rang out on new year's day in a ohio trailer park. a deputy was killed. the shootings continued from there. an officer was gunned down in a standoff in wisconsin. two more died in a shootout in miami. and three were killed in st. petersburg, florida, a city that had not suffered a fatal police shooting in 30 years. while no cops were killed in los angeles, police chief charlie beck says attacks on his officers jumped 22% in 2011. >> that's the only major crime area where we saw an increase was attacks on police officers. >> reporter: why is that happening?
>> it's really hard to say. many times it's people that have decided that they have nothing more to gain, nothing to live for. >> reporter: chief beck says police are often confronted by heavily armed and brazen suspects. >> we have a lot of gang members who are desperate not to return to prison and they will engage police officers. >> reporter: the 72 police killings marked a 29% increase over the 56 officer deaths recorded in 2010. guns were used in 63 of the police homicides and more officers died in the south than any other region. perhaps most troubling, 49 of the killings-- about two-thirds- - involved officers wearing body armor. police say the jump in police killings is a random event that cannot be explained and conventional wisdom is that violence against police spikes when the economy sputters.
the fbi says 50 police officers were killed in accidents, but scott i have to tell you that's 22 fewer accidental deaths than the year before. >> pelley: better news. bob, thank you very much. volunteers wanted for the biggest clinical study ever of alzheimer's disease. roger clemens' ex-trainer tells a jury the baseball great did use steroids. and the piggyback partners fly into history when the "cbs evening news" continues. vening news" continues. with less chronic osteoarthritis pain. imagine living your life with less chronic low back pain. imagine you, with less pain. cymbalta can help. cymbalta is fda-approved to manage chronic musculoskeletal pain. one non-narcotic pill a day, every day, can help reduce this pain. tell your doctor right away if your mood worsens, you have unusual changes in mood or behavior
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[ female announcer ] new from stouffer's. farmers' harvest steam meals taste so good we'll bet the farm on it. >> pelley: in bethesda, maryland today, the national institutes of health opened a meeting on alzheimer's disease. more than five million americans have the disease and that number is expected to triple by 2050. wyatt andrews found out that some research is being held up by something you might not expect. >> reporter: the goal is to invent the first-ever detection test for alzheimer's disease. it involves m.r.i. scans, pet scans and even spinal taps from hundreds of patients to find the disease before the patient even knows there's a problem. dr. raymond turner is at the georgetown university medical center, one of 57 sites for the study. you may be able to detect alzheimer's? >> we may be able to screen and begin treatment even before symptoms begin. >> reporter: learning how a
brain with alzheimer's shrinks over time is one key to early detection, so is this: the buildup of toxic proteins-- this one in red called amyloid, one of the hallmark signs of the disease. images from this project have excited researchers from around the world, but there's a problem. >> the problem is in finding volunteers to join the study. >> reporter: patients? >> patients. >> reporter: this one study is 250 patients short. nationwide, almost every clinical trial related to alzheimer's is short on volunteers because most patients with the disease don't know they have it and healthy patients fear becoming guinea pigs. some of the patients in the imaging trial feel the threat of alzheimer's personally. 79-year-old marian myles has agreed to 18 months worth of test and scans because alzheimer's has stricken her husband. >> when i think that it might touch my children and my grandchildren i do want a good
diagnosis and a good cure for this. >> reporter: so this is not too hard? >> no, it's not too hard at all. >> reporter: the president's national plan to combat alzheimer's disease due this month will recommend this research fund being increase four-fold to $2 billion a year. but one key obstacle isn't the lack of funds for research, it's the lack of patients to be in the research. wyatt andrews, cbs news, washington. >> pelley: we have one more note on politics tonight. texas congressman ron paul has told supporters that he won't compete in any more republican presidential primaries. he doesn't have the money. but he will continue to hunt for delegates at state conventions and paul gave no indication that he will endorse mitt romney. one of the nation's top marching bands has been silenced. but for how long? that's next. that's next.
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>> pelley: the president of florida a&m said today the school's famous band, the marching 100, will remain suspended. no performances for at least another year as the school tries to root out a culture of hazing. 11 band members face felony charges after a drum major was beaten to death last fall during a hazing ritual. in washington, the prosecution's star witness took the stand today at roger clemens federal trial. the pitching great is accused of
lying under oath to congress when he said he never took performance-enhancing drugs. brian mcnamee, a former trainer, testified he injected clemens with steroids eight to ten times when they were with the toronto blue jays back in 1998. the social security administration has just put out its annual list of the most popular baby names. for boys, jacob is on top for the 13th straight year. but look at this: mason soars from number 12 to number two boosted by a reality show. number three is william. sophia has overtaken isabella as the most popular girl girl's name. emma is number three. the story behind the oddest couple ever to take flight when we come back.
very sore looking kinda blistery. it was like a red rash... like somebody had set a bag of hot charcoal on my neck. i was a firefighter for 24 years. but, i have never encountered such a burning sensation until i had the shingles. i remember it well. i was in the back yard doing yard work. i had this irritation going on in my lower neck. i changed shirts because i thought there was something in the collar of the shirt irritating my neck. and i couldn't figure out what was going on. i had no idea it came from chickenpox. i always thought shingles was associated with people... a lot older than myself. i can tell you from experience, it is bad. it's something you never want to encounter.
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of a 747, which got us to wondering: how do they do that? we asked chip reid to show us. (cheers and applause) >> reporter: it was a stunning site as the shuttle "discovery" soared piggyback over washington's national mall and ten days later the "enterprise" over new york city on top of a specially modified 747. ray zink, the nasa contractor, has been putting shuttles on top of jumbo jets for 14 years. we caught up with him at the intrepid museum in manhattan where the "enterprise" will soon find a home. when you first heard they were going to put the orbiter, the shuttle, on the back of a 747, what did you think? >> at first off you don't think it's possible. you look at the sheer size and drag and you're like "it can't be done." >> reporter: zink has supervised the coupling more than 40 times, it takes place in a massive ten- story steel structure, a ten to 12-hour process in which the shuttle is carefully placed in a sling then slowly lifted. the 747 is moved underneath and the shuttle is then lowered into
place and secured with just three large bolts. >> the three attach points where the shuttle is mounted to the 747 are the exact same three attach points where it mounts to the external tank during launch. so it's not ever going to fall off. >> reporter: this weekend zink supervised the off loading of "enterprise" at kennedy airport in new york. but there's no steel tower here so he used two heavy lift cranes, one weighing more than a million pounds. if watching a shuttle on top of a 747 is awe-inspiring, imagine what it's like to fly it. jeff moultrie was the pilot over washington and the co-pilot over new york. >> that was a great flight. the first thing you see federal from a distance is the statue of liberty and to be able toll go over that and to basically own new york for a period of maybe 45 minutes. >> reporter: but flying this contraption has its downsides. >> with a shuttle on board the handling characteristics and the
drag factor are vastly changed. >> reporter: while the 747 is stripped bare inside to reduce weight, takeoff can be a nail- biter with the plane carrying 704,000 pounds, very close to its 710,000 pound maximum. both moultrie and zink are still amazed it gets off the ground at all. >> as many times as you see it you still stand back and go "is it going to make it? is it going to make it? there it goes." it's unbelievable. you can't believe it. >> reporter: he'll get to believe it again in september when the 747 carries the >> good evening i am alan martin >> and dana king, calling it a day of reckoning, the governor
releases a budget with billions of dollars and cut. >> the anticipated budget deficit was more than $9 billion of that number has ballooned to nearly $16 billion. the governor says the cuts are unavoidable with a shortfall so large. here is phil matier without the governor plans to close the budget gap. >> the first thing he did was take a dose of reality and admit the numbers that had earlier in the year were off. way off. here's the story. >> it is a difficult budget. but it reflects the fact that revenues are lower than we expected. >> that was governor jerry brown explaining that while revenues are up in the state, they're not up enough and as a result another $8 billion needs to be cut in state health care plans, nursing-home care, social services, plus a 5 percent cut in government workers' salaries. >> the idea is that of course it