Alyssa Caplan
AC360° Staffer

If you’ve ever wondered how we prepare guests at AC360°, here is your chance to find out! I want to share the chatter that took place as I prepared for a segment last Thursday when we were doing a live show from Hofstra University.

We set out to tell the stories of the individuals behind the headlines and offer practical survival advice. College students are no less immune from the challenges of the recession than the rest of the world. The students I met at Hofstra shared stories that were both heartwarming and sobering as they discussed mounting student debts and juggling jobs on top of studies to help ease the financial stress on their families.

We picked five students that were representative of a collective student body to ask questions to our expert guests: Frans Johansson, author of "The Medici Effect" & Innovation Consultant & Donna Rosato, Sr. Writer, MONEY Magazine.

The conversation you'll see here unfolded before I walked them outside through the crowd to Anderson and the crew for their segment.

The Lepley family's new home, recently purchased for $250,000 once valued at more than $550,000.

Derrick, and Mary Ann Lepley with their daughter, Melody.

The house that the Aceves family is trying to short sell.

Paul Vercammen
CNN Senior Producer

The two-story homes on Fir Circle in an upscale Lake Elsinore, California neighborhood tell two stunningly different tales.

Some are vacant, bank-owned and beat-up inside.

Others are filled with kids' laughter and the sounds of boxes unpacking and families moving in.

Mary Ann Lepley, her husband Derrick and their two-year-old daughter Melody have been in their 3,000 square-foot home on Fir Circle for almost three months.

They bought it for about $250,000 and it once sold for most $300,000 more than that.

The couple is in their mid-twenties.

"We never, ever expected to be able to buy a home like this," says Derrick walking through the four-bedroom house. "But look at it, we feel fortunate."

The Lepleys are “Sunday School polite” and say they feel for people in this neighborhood who have lost their homes or are fighting to keep them.

Right next door Frank and Leslie Aceves are in the midst of a different situation. They are trying to "short sell" their house in order to avoid foreclosure and lose everything to the bank.

The couple has two children, 10 and 3, and they bought their 3,500 square-foot home for $620,000 a few years ago.

A house about the same size across the street recently went for $267,000 thousand dollars.

"We just didn't think it (the plunging prices) would happen," said Leslie Aceves, who recently lost her job. "We just thought it would stop somewhere."

Lake Elsinore is in California’s Riverside County where the assessor's office says one in 80 homes is now in the foreclosure process.

"Riverside County is in the middle of the mortgage meltdown," laments County assessor Larry Ward.

"It's really tough on people, the foreclosures and prices that dropped below one hundred dollars a square foot."

The agony and the ecstasy.

For many families going through the process of home foreclosure, or selling short, there are other families buying homes they never thought they could have afforded before the downturn of the housing market.

Editor's Note: As part of AC360°'s Road to Rescue, we went to Pittsburgh to take a look at how Pittsburgh has rebuilt it's economy. You can read Randi Kaye's blog on the subject here.

Mike Madison
Pittsblog

The possible collapse of Detroit-centered American automobile manufacturing has put Detroit at the front of national conversations about de-industrialization and urban failure and renewal. The buzz has it that Pittsburgh went through this process and has come out the other side, successfully. CNN called me on Monday to ask if I would be part of a segment, shot here on Tuesday, that would look at Detroit from Pittsburgh's perspective. (CNN found me via this blog. I'm not sure how they found this blog, though perhaps it's because I was quoted in a similar story last year in the Detroit Free Press.) The story pitch: Pittsburgh is doing pretty great. How did it happen, and what lessons should Detroit learn? The producer planned to shoot my piece of it at the Waterfront. Massive steel mill becomes shopping mall. How better to illustrate an American story of urban renewal?

On Wednesday afternoon, we did meet at the Waterfront, and we spent an hour or so taping an interview. The piece was shot on a strip of grass right next to the Courtyard by Marriott, by the Gantry, just west of the Homestead bridge. The camera guys wanted to have the river and the bridge in the shot. The reporter (oops - in TV speak, the correspondent) was Randi Kaye.

Read more...

Anderson talks with his guest about ways Detroit workers can innovate after the industry problems facing the state.

Jim Cheatley on his motorcycle.

Inside the SRS plant.

Paul Vercammen
CNN Senior Producer

Call it a journey to a job. Jim Cheatley rode his motorcycle from his San Clemente, Calif. home, through the north San Diego County countryside on the windy Ortega Highway, past the Eucalyptus trees, crossed into Riverside County and parked his bike at SRS Engineering.

The married father with a six-year-old son walked into the industrial park, resume in hand, and to apply for work with SRS Engineering.

“It was a great ride from San Clemente to here,” Cheatley smiled. “No problems on the road, beautiful.”

Cheatley dropped off his resume in a plant filled with smiles and optimism. Cheatley is a chemical and electrical engineer and therefore thinks SRS might be able to use his expertise because it manufactures parts for biodiesel plants throughout North America.

This is a company that went from about $500,000 in revenue a few years ago to an expected $20 million or more this year.

Sparks fly throughout the SRS plant as columns for biodiesel operations are built. The sounds of welding, soldering and wrench twisting echo in the industrial park.

Welder Robert Reed was just hired by SRS last week and is helping put together plant parts that are bound for Missouri and Texas. Reed had been unemployed since October.

“It feels good to be back I work,” Reed says. “It feels like you are supposed to. I like that it’s green. I feel like I am doing my part.”

SRS CEO Clay Hawranik explains that the parts may create more jobs once they hit the ground.

“They are going to need crane operators and other support personnel to put the (biodiesel) columns in place,” Hawranik says. “Then you have to have operators manning the plant 24-7. So that can be dozens of more jobs.”

When SRS builds, they pay their vendors, steel suppliers, valve makers, 20 electrical companies and more. And SRS is on the brink of signing some other large projects in North America and Hawranik says he needs to hire 20 to 30 more workers in the coming months.

Hawranik says the main reason his operation is growing so fast is that government incentives are encouraging more investors to get into the biofuel business.

That’s good news for the motorcycle riding engineer Jim Cheatley, who used to work with glass but now wants to get into biodiesel plant building.

He’s been contracted to a trial period next week, and employees from SRS predict he will most likely keep the job full-time. Perhaps Cheatley can figure out an easy way to run that motorcycle on biodiesel.

Randi Kaye
AC360° Correspondent

Detroit, Michigan is teetering on the brink of collapse but it might be able to save itself by taking a good look at Pittsburgh, Pennsylvania.

Back in the '70s and '80s, Pittsburgh’s steel industry collapsed and hundreds of thousands of people left town. This is similar to what we’re seeing now in Detroit with the auto industry.

Pittsburgh, in effect, died. It had to find a way to reinvent itself after it had been relying on just one industry for economic growth for so long. So Pittsburgh turned to what residents and local economists might call "recession-resistant" industries, like health care and education.

Many locals call it the "Meds and Eds” economic approach. It seems to be working.

The University of Pittsburgh Medical Center is now the biggest employer in town with 26,000 people. Carnegie Mellon University is well known for an innovative Robotics program, and biotech is hot here.

Even the first office tower in downtown in 20 years is under construction. Guess who’s building it? PNC Financial Services ... a bank! Call it luck, but PNC pretty much got out of the mortgage business before the whole subprime mess and never wrote bad loans so they are actually growing without any stimulus money! Their conservative style paid off.

These reasons are why experts say Pittsburgh might make a good model for Detroit. Both cities long relied on one industry, have strong research universities and have seen their populations shrink.

And it’s not just that Pittsburgh is surviving, it’s thriving. Foreclosures are down, while in the rest of the country they’re up. Unemployment has crept up to 6.5 percent, but it’s still well below the national unemployment rate of 8.1 percent.

Home prices in the Pittsburgh region increased, on average, by nearly 1 percent in 2008, while nationally, home prices declined 8.2 percent, the steepest annual amount on record. Moody’s says Pittsburgh will be the only city out of the top 100 U.S. metropolitan regions to post a gain in housing prices one year from now.

Detroit should take notice. There may be a life-saving lesson here. Sure, Pittsburgh isn’t perfect. It will lose jobs this year and condo sales downtown have slowed, but TIME Magazine calls Pittsburgh, “One of the Bright Spots on Main Street.” That’s a pretty big compliment when the economy is in the tank, don’t you think?

Program Note: For more on how Detroit is coping with the economy, tune in to AC360° tonight at 10 p.m. ET.

A neighborhood ghost town in Detroit.

A home near 8 Mile Road, in the neighborhood where Caron's grandmother lived.

Paul Caron
CNN Producer

It had been at least 10 years since I’d seen parts of my hometown Detroit's neighborhood streets. I grew up on the east side, and spent more time in the area during the early days of my career at the CNN Detroit Bureau. Could it be possibly be any worse than the blight I remember from back then? Yes.

In some neighborhoods, empty lots outnumber the burnt out shells of what were once fine, middle-class homes. The area was built for the working class of the 1940s and 1950s, and survived the racial tensions and riots of 1967 but – like many things here – it could not survive the Motor City meltdown and its ripple effect.

The drive into the city should have been fair warning. At midday, I-75, which winds through the heart of downtown Detroit, was as empty as a snow holiday in my current hometown of Atlanta. I expected the proverbial tumbleweed to roll across the highway. I remember that strip, a major highway leading to the Bridge to Canada, packed with trucks of all sizes. Not on this day, though.

A row of industrial building for sale on Groesbeck Highway.

One street off Van Dyke on Detroit's east side had 10 abandoned homes; four charred from fires. Yet there were still a few hold-outs, homes with people still living in them, coping everyday with a neighborhood in decay. I ran into a woman delivering mail for the post office, amazed people still lived in this area. "Sure they do, but yea, these other buildings, it's just sad. I feel safe, but it is a little surreal, with that,' she said, looking at one torched house, blackened from a fire, with mainly the frame still standing. A neglected plot had become just another eyesore for the city.

The meltdown of these neighborhoods didn't all happen during this economic cycle. This has been going on for almost 40 years. In the ‘70s, Mayor Roman Gribbs invested in the downtown area. The Renaissance Center, now headquarters for General Motors, was built. In the ‘80s and ‘90s, Mayor Coleman Young didn’t invest much in many of the neighborhoods. The most recently elected Mayor, Kwame Kilpatrick, had his own share of problems, which eventually lead to his resignation and a city plagued by rampant decay.

But there are signs of hope. There are some neighborhood streets with nice, modest, well-kept homes and lawns. Indian Village, a posh Victorian-style neighborhood, with huge vintage homes, is sandwiched around other not-so-nice blocks. But it is still pristine, almost like walking back in time. It’s getting harder and harder to find these pockets. Many are trying to temporarily forget their troubles the old-fashioned way – it was impossible to find an empty bar on St. Patrick's Day. Even Bally Cork and Nemo's, both blocks from the half torn down Tiger Stadium, were standing room only in the area called "Corktown.”

Detroit's Tiger Stadium.

There doesn’t seem to be a light at the end of the tunnel for most people. I have immediate family and friends who work in the auto industry, and this recession is new territory for everyone. Some have watched property values plunge by 50 percent. A good friend, who owned an East side bar and grill, had been warning me now for over a year, "This is beyond a recession, this is a Depression.” He had to cut staff and figure out ways to stay in business given the reliance on consistent patronage of people in the auto industry.

He showed me rows of industrial buildings up for sale on Groesbeck Highway, the major industrial highway in the east suburbs. "We're still at least a year from getting out of this," he guessed.

The spring weather this week here was a psychological shot in the arm. The bleakest winter in memory is finally about to pass. But the abandoned homes and businesses aren't going anywhere ... hopefully neither are those good folks who still live in the city.

Program Note: Tune in to hear more from John Vause about how GM is doing in China tonight on AC360° at 10 p.m. ET.

The president of GM China Group tells John Vause that General Motors is doing well in China.

While General Motors is facing bankruptcy, and asking for government help in the US and parts of Europe, in China the company is making a profit, and has been described as one of the last jewels in the GM crown. It has also sent a clear message to policy makers in the US that this is a company than can compete globally, it's a company worth saving.

Program Note: Tune in for Anderson's full report on how people in Detroit are coping with the economy tonight on AC360° at 10 p.m. ET.

A group of artists is buying and moving into a Detroit neighborhood.

Ismael Estrada
AC360° Producer

We drove into the Detroit neighborhood where local artists Mitch Cope and his wife Gina Reichert were meeting us for an interview. As we approached we passed abandoned buildings, burned out houses and foreclosure signs — examples of how hard this already struggling neighborhood has been hit by the current economic crisis.

But despite the blight, Cope and Reichert are excited about the future of their neighborhood. They had grown tired of watching vandals strip abandoned homes so they so they decided to buy one, secure it and make it a self-sustaining green energy home. And they’re inviting friends to move to the neighborhood to do the same.

Cope and Reichert walked us around the neighborhood and spoke about their plans. Bring in artists and friends, create green energy homes, invite the community to take part and turn the neighborhood around. Their idea is new, but they have other people onboard. We met a German couple who was looking to buy property in the neighborhood, another couple bought a house for $500, and another couple from Chicago is closing on a $100 house down the block.

Cope and Reichert say if they don’t have to worry about paying a mortgage, they can put their money into making homes completely self-sustaining. They talk about using solar energy and wind turbines to not only power their homes, but homes next door. They want to make homes a place for artists to come visit for months at a time to work on their art and display their work to community. They’re brainstorming other projects too: they want to invite neighborhood children to plant vegetable gardens and get them involved with other community programs as well.

Neighbors are excited about the couple’s plans. We met a man who has lived in the area for a few years. He was tired of the problems in the area and was looking to move, but after meeting with the artists he was relieved and says he no longer plans to leave. He says these ideas are a breath of fresh air—and wishes the artists all the luck in the world.

President Obama's chief economic adviser says more bailout money is possible for AIG. Ed Henry interviewed Summers this week – take a look at his report.

Louisiana is moving slowly on Katrina cottage building. Will it lose FEMA money because of it? CNN's Sean Callebs reports.

A volunteer project in NOLA is a needed stress reliever during tough economic times. Anderson Cooper reports.

A Southern California business gets a needed jolt, after owner starts making healthy tortillas. CNN's Ted Rowlands reports.

Ed Henry interviews Larry Summers, the President's chief economic adviser.

Ed Henry
CNN Senior White House Correspondent

With outrage mounting over AIG's $165 million in bonuses, the President's chief economic adviser offered a new line of defense for the White House in an exclusive interview with CNN.

Larry Summers suggested that if Treasury Secretary Timothy Geithner had pushed the insurance giant too hard on the bonuses, AIG could have collapsed just like Lehman Brothers and sparked an even bigger crisis.

"Secretary Geithner has used all the legal authorities that are open to him to contain and limit the payment of bonuses," said Summer, chairman of the National Economic Council. "What he did not do, and what would have been irresponsible to do, as outrageous as these payments are, would have been to put at risk the stability of the financial system. To have courted the kind of disaster that followed the decision to let Lehman Brothers simply collapse might have felt good briefly but it would have touched the lives of a huge number of Americans who would have unnecessarily become unemployed or seen destruction of their lifetime savings."

Summers said Geithner was notified about the bonuses last week and tried to stop them but ran up against a legal contract. "Secretary Geithner courageously has gone after these bonuses and will continue to go after these bonuses in a very aggressive way but we can't suspend the rule of law and we can't put the whole economy at risk," said Summers.

Asked whether AIG could get more bailout funds down the road, Summers suggested the door is open to more taxpayer money - despite the bonus controversy.

"It is wrong to govern out of anger," said Summers. "We have to recognize what we are angry about, do something about it. That's why we are focused on a new resolution regime as part of a sweeping overhaul of the financial system ... But we can't let anger stop us from taking the steps that are necessary to maintain the stability of the financial system, keep credit flowing."

Ed Henry
CNN Senior White House Correspondent

The President's chief economic adviser is not quite as bullish about a turnaround as Federal Reserve Chairman Ben Bernanke, who's predicting the recession may be over by the end of 2009.

Asked about Bernanke's prediction, Summers said he was upbeat about some aspects of the economy - such as a 22 percent spike in housing starts and recent upticks in the stock market - but said he was cautious about making any grand pronouncements.

Summers told CNN that while he's confident of a turnaround, "just what day the turn will come isn't something that i would dare to forecast" at this point.

"Something that the President has made clear to us is his approach and the approach he wants us to take is a recognition that we don't panic when there's a bad number, bad day on the markets, and we don't become euphoric when there's a good day in the markets, or a good number," Summers said in an exclusive interview with CNN.

Asked specifically about Bernanke's prediction on CBS' "60 Minutes" about the recession ending this year and 2010 potentially being a year of recovery, Summers demurred.

"We always are at pains to recognize when we talk to the President that economic forecasting is the most imperfect of sciences," said Summers. "Many people would say it wasn't a science at all. We stress the uncertainties in this situation."

But Summers said there is a "natural dynamic" to the business cycle. "And much more importantly the President's program, the economic recovery program, with reinvestment, substantial investment in our country, the tax cuts for middle class families, the measures to support the housing market and bring down the cost people have to pay for mortgages and prevent foreclosures” will have impact.

Program Note: For more on Alonso Arellano's green tortillas, tune in to AC360° tonight at 10 p.m. ET.

Alonso Arellano in his Nopaltilla factory. He says the demand for these green tortillas is greater than the supply.

Paul Vercammen
CNN Senior Producer

Alonso Arellano believes the green tortillas flopping onto a conveyor belt in his small factory are their own economic stimulus in a clear plastic package. The tortillas, called Nopaltillas, are made with powder from the nopal or prickly pear cactus, renowned in Mexico for its healthy properties.

Arellano says right now the demand for these tortillas is greater than supply.

“You know instead of giving all this money to AIG executives, they should just give it to me to invest,” Arellano says. “I could take that money, rebuild tortilla factories that are struggling in this economy. And that would create jobs.”

Arellano is one of those restless entrepreneurs who runs around acting like he’s just glad to be breathing.

And he is. Arellano almost took his last breath at the age of 11 while visiting the United States on vacation from Mexico.

“I always had this pain in my legs, and they started hurting real bad so my mom took me to the doctor,” Arellano explains, “They did some tests and found I had 90 percent blockage in the artery near my heart.”

Arellano underwent heart surgery and never returned to Mexico.

But Arellano still clings to much of his Mexican heritage – including the belief that the prickly pear cactus is a cure-all.

“Growing up all I ever heard was how good the prickly pear is for you,” Arellano explains “They say it helps reduce cholesterol, that it’s high in dietary fiber and it’s only 50 calories for one tortilla,”

Now only four people work for Arellano making tortillas, but he says that number could grow. Arellano is in talks about partnerships with a major health food store chain, a northern California distributor that ships to 150 stores, and a Latino supermarket chain.

“If any one of these hits I will go from shipping boxes of tortillas to palettes,” he says. Most of his sales are from stores.

But he also sells the Nopaltillas on the internet for $1.49 a dozen, and $2.99 for three dozen.

Arellano says he tested and fiddled with the recipe for months.

Seems like he got the formula right. Take a bite out of one of these Nopaltillas without anything extra on it and it tastes great plain.

It's nice to see something as simple as a green tortilla can inspire a little consumer spending.

Anderson visits an L.A. neighborhood to speak with a local gang prevention group called Kush.

CNN's Randi Kaye talks to one man who is coping with his economic stress by taking more prescription medications.

Program Note: Tune in tonight to hear more about the project and the situation in the region as Anderson reports live from New Orleans on AC360° at 10 p.m. ET.

The St. Bernard Project is a nonprofit organization in St. Bernard Parish, Louisiana, that helps people return to their homes that were damaged by Hurricane Katrina.

One house that is being rebuilt by the St. Bernard Project.

Kay Jones
AC360° Coordinating Editorial Producer

Is the economy hurting volunteerism? Not in St. Bernard Parish, Louisiana. I spent yesterday afternoon touring the business offices of the St. Bernard Project and was amazed at how much co-founders Liz McCartney and Zack Rosenburg have going on. Right now, they have 35 houses in some phase of rebuilding. By Wednesday, they will have completed their 200th home in this parish that was so devastated by Katrina.

When I talked to them about donations to the organization, they said while they can always use more, they haven’t seen any significant drop off in donations so far, and that is helping more and more families move back to the homes they love.

After touring the offices, I went to the home where we’ll be tonight bringing you the latest on the economy. The home is about two weeks away from when the homeowner will move in. She wasn’t there, but I heard from several of the volunteers about how excited she is to finally get back into the home in which she grew up.

The St. Bernard Project is making so much progress and will be expanding soon. I’m not sure I can give you all of the details yet, but hopefully Anderson can tonight.

After I finished my visit with the volunteers at the SBP, I made the drive to the Lower 9th Ward. The last time I was in that area, Hurricane Gustav was hitting and the waters of the Industrial Canal were lapping over the rebuilt levee. It’s amazing how much has been done for those who want to move back to that neighborhood, with several houses from the Make It Right Foundation already occupied and many in the process of being built. I ran into many people trying to break ground on a new home, and they were not letting the light rain deter their efforts.

While on my trek through some areas familiar to the 360 gang, I stopped by Mr. Herbert Gettridge’s home. Nobody was there, but I’m hoping to get by there today and say hello. I will let you know how it goes!

A house in New Orleans being rebuilt with help from the St. Bernard Project.

Penny Manis
AC360° Senior Producer

Anderson travels to 5 cities in 5 days to report on the money meltdown that’s changing your life. He’ll tell you what the numbers really mean, where the jobs are, and explain how the President’s proposals affect YOU.

Last night many of you caught him in LA, and tonight he reports from New Orleans. Anderson has a story cooking that we are titling ‘Return to Volunteerism.’ He profiles a woman who is working with the St. Bernard Project, which is tasked with rebuilding homes for Katrina victims. This woman, despite financial issues of her own, helps with this project multiple times a year. She believes that in times of hardship, it is more important than ever to give back.

Sean Callebs has a story on money that FEMA gave the state, $75 million to be exact, for cottages to be built and house folks, but the Louisiana Recovery Authority has failed to use this cash for intended purposes. Watchdog groups worry this is what happens when bulk money from the government lands in the hands of state officials. Do they have trouble funneling it to priority projects? Sean will break it down for us.

We’ll be taking questions from the folks who show up to mill behind Anderson himself. While they want their 15 minutes of fame on TV, they will also be asking our Money Panel questions about the state of the economy, and many of their Q’s could echo your own.

The backlash is building coast to coast as bailed out insurance giant AIG hands out more than $160 million in bonuses to the executives who drove the insurance giant into the ground. President Obama indicated he will crack down, and one of his peeps on the WH Council of Economic Advisers said, “It’s almost like these guys (AIG) should have gotten the Nobel Prize for Evil.” What happens next w/AIG? We’ll be watching.

We hope you like our coverage! Tomorrow Anderson is in Detroit, Thursday in NYC, and Friday in Miami. Let us know if you have stories you’d like to see on our show this week! We are always open to your ideas. Have a great St. Patty’s Day, and see you tonight at 10pet!