that does it for this edition of "360." "outfront" next -- so you lose $6 billion and your stock goes up 6% for the biggest gainer in america. how does that add up? well, it adds up to how much we do not know about our banks. and the feds bust two men, accusing them of trying to supply iran with nuclear material. and billions spent to drill for oil in the arctic but will it actually ever happen? let's go "outfront."

well, good evening, everyone. "outfront" tonight, losing money, rewarded big time. today, jpmorgan's stock was up like a july firework. surging 6%. in fact, it brought the whole market along. r a friday the 13th surprise. it was the best day for stocks this month. and it doesn't add up. so, jpmorgan shares popped in reaction to the bank announcing that losses from that high-profile trading blunder we've been talking so much about now top $5.8 billion. now, that $5.8 billion is about three times more than the company said it would lose on this trade just weeks ago. today, the ceo of jpmorgan, jamie dimon, took questions on an earnings conference call, and he said he's earned a lesson. >> we've learned a lot. i can tell you this has shaken our company to the core. >> the truth is no one is sure if other banks have trades like

this going on or whether it will happen again at jpmorgan. the truth is, we do not know very much about our banks. jamie dimon didn't know about the now infamous trade for so long that for weeks he defended media coverage of it as a tempest in a tea pot. and today, dimon said he didn't know much about something else that could cost his bank and the entire banking industry big money. that is, how wide spread is manipulation of the key interest rate that sets american mortgages and credit carts? >> all i can say, like all of these things, a lot of people will be doing exams. we're totally open to regulators. i'd be a little patient if i was you. not everything is the same. it's going to take a while. not all companies are in the same position. >> as of today, morgan stanley -- yes, i understand is ironic banks making estimates about banks and what they're doing or not doing. anyway, analysts there estimate

the so-called libor rate manipulation scandal could cost banks $14 billion. that's fines and fees on the banks. you say great, they should pay it, those jerks. here's what it means, $14 million less for those banks to lend, which will hurt the rest of us. banks are crucial for our economy. we need them to thrive. they have become so big that they seem to control our fate. just yesterday on this show, dan gross, the economics editor at yahoo! finance, suggested the u.s. economy is sort of like the titanic. i loved the image. it got us playing a little game. take a look at this little image. our economy is the titanic. it feels invincible and huge. the most amaze thing in the history of the earth. even after the financial crisis. pretty much just like the titanic was, right? we were sailing along till we hit that jpmorgan trading loss. and it jolted everybody. it jolted our ship. we said, wow, is our economy still at risk from banks? then the shaki stopped. and we went back to having a

good time on our ship. the problem is, 90% of an iceberg is under water. below us at this very moment, our little ship, america, could be a massive chunk of ice. because there is so much we cannot see. there are trades that can bring banks down. and this. the top four banks in the united states of america are equivalent to 51% of our entire economy. that's pretty stunning, everybody. the entire output, all the cars we make, the computers we make, everything we do in this country, banks' assets are 51% of that value. they're equivalent to that. $7.7 trillion. trust us, big problems there can sink our little titanic just like that. "outfront" stephen moore, "wall street journal" editorial page. and john cowan, co-founder, president of third way, a centrist think tank. good to see both of you. appreciate your taking the time. steve moore, let me start with you.

obviously jpmorgan shares surge, things could be worse. the titanic image is frightening when we look at banks. if someone like jamie dimon isn't sure how big, how widespread, how significant the interest rate manipulation might be. >> we certainly learned that in 2008, erin, when two weeks before the big financial crisis, nobody thought there was a crisis. two or three weeks later, we saw major banks that basically their stocks went down to nothing. so you're right, these things can happen very quickly. where the valuation of these big banks can fall substantially. i do think what happened in the case of jp morgan is i think investors thought that there was a lot more than six billion dollars of losses. i think -- we had talked a few weeks ago -- that the losses could be $10 billion or more. it's no too surprising when they said it was closer to $6 billion, the value of the shares went up. in terms of what we do about this manipulation, apparent manipulation of the libor rates, the problem here is it's not

really a market, erin, it's set by the banks, it's kind of an insider trading kind of scheme. maybe what needs to be done is anchor all these other interest rates to something like the treasury bill rate, which is set by the market, not by insider traders. >> right. that sounds like a reform that make sense. let me ask you this key question, though, that seems to come from the fact that you have banks that are bigger than they were before the financial crisis. 50% of the u.s. economy. yet trades are happening at these banks. ceos don't even know about. how much do we not know about our big banks? >> well, look, as you said, and i think it's absolutely right, banks are a central part of our economy. and they do a lot of good. and we -- we can't ever forget that. but right now it's very clear that we don't know what's going on in certain portions of our financial sector. and what happened with libor, i think stephen's dead on in this, you have a real conflict of interest. it's actually quite similar to

the situation we had with the rating agencies back in the mid and late 2000s in which they were essentially self-regulating but they weren't doing it very well. we don't exactly know what's going on right now in sectors of our banking system. but let's keep in mind banks and the financial sector play a crucial role in buying a house, insuring your life, sending your kid to college, and we can't actually even discuss or think about throwing the baby out with the bath water. >> you know, erin, that is a key point. because, remember a year or two ago, when banks were doing very well, people said, what an outrage, they got these big -- they got these big bailouts, now they're making these big profits, paying these ceos money. when we find a bank like jpmorgan that has these big losses, then we said, how could they have these big losses. we have to decide whether we want our banks to be a success or a failure. i fall on the side that they're instrumental to our economy. >> they are. >> that we want them to be successful and the question really is -- >> but they have to do -- >> -- how do they do that -- >> if you're out there watching but you get so frustrated they do these trades or they're

manipulating interest rates. i mean, you can't be doing that stuff and have people rooting for you. these guys have to shape up. maybe they need to break up. >> you're totally right about that, erin. let's separate out the two issues. they're quite different. what happened to jpmorgan is there was some stuff going on. trades they shouldn't have made. dimon's acknowledged that. they made serious mistakes. the reason their stock went up today is twofold. one, markets like certainty. now there's a number. secondly, the bank still has a healthy balance sheet. that's very different than libor. libor is terrible. it's a serious crisis. it's like fixing the points spread on the super bowl. that is quite different than mistakes or bad trades at banks and we need to keep them separate. >> all right, thanks -- final word, steve. >> the reason it's a crisis, it makes people think that the -- all of these markets are being manipulated. >> that's right. >> that's another thing i find very troubling. folks, that's not the case in most cases. i think in libor that was the case. manipulation going on here.

>> we all agree, we need a lot more transparency. what about gasoline prices or everything else? thanks, we appreciate it. still "outfront," mitt romney gives an afternoon of surprise interviews. in tv, we could watch them all, so i watched every single one of them, and he was sweating. and then the obama administration and marco rubio both agree a valedictorian should be allowed to stay in the united states. so why is she being told otherwise by the united states government? and george zimmerman's attorney filed a motion in court that would have major, major implications on the trial. i bought the car because of its efficiency. i bought the car because i could eliminate gas from my budget. i don't spend money on gasoline. it's been 4,000 miles since my last trip to the gas station. it's pretty great. i get a bunch of kids waving at me... giving me the thumbs up. it's always a gratifying experience. it makes me feel good about my car.

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our second story "outfront," mitt romney fought back. >> if there's a difference between being a shareholder, an owner, if you will, and being a person who's running an entity. and i had no role whatsoever in managing bain capital after february of '99. >> we explained this last night. said mitt romney could have done a better job by explaining it. perhaps avoiding having to do interviews where he had to sit and ruin a friday afternoon. he ended up having to do that. responding to charges from several media outlets and the obama campaign that he was part of bain four years after he said he left. listen to him earlier this week. >> if you're responding, you're losing. >> john avlon, michael, rahmin.

michael, this is kind of like mitt, he can't seem to get out of his own way sometimes. he respoed. >> when you're responding badly, you're losing. that's the second tier version of it. it really was not a very effective response i didn't think. because it sounded like he was clinging to technicalities. saying, well, i owned the entity, but i wasn't managing bain capital, sounds sort of like no controlling legal authority or something like that. he should have from the perspective, my own perspective, not only as a lawyer but actually as a former campaign hand, he should sit down and answer the questions at length. but he may not want to do that because that gets to the issue of his taxes and it's hard to do that without -- >> it's hard to separate those two things, john. that was my argument yesterday. i thought i was very frustrated. he needs to sit down and do one long interview and go through details. i watched everybody and i almost fell asleep. he kept talking about the pin nokias. the rating by the fact checkers of the statement.

>> that's right. he didn't have the clear simple explanation. look, this was a way for him to keep his investments while he was no longer actively involved in management. it's not as simple and clear as it should be. but it's credible. that's the key point. here's the big thing. the difference between the statement he made where he said if you're responding, you're losing, and today, that's been a significant stretch in personnel and strategy on the communications team. >> that was today, right? >> that was today. two new people brought on. we see kevin madden who came on l.a. week. all of a sudden, it's a shift in strategy. it's, let's get out front, let's play offense. even though it was a friday afternoon, which is not the best time to play offense in the political cycle. >> he said let's get out front. it's too bad they didn't. ryan, do you think he did well in his response or it was a sign of weakness to come out and

respond in all these interviews on a friday afternoon? >> i think john actually makes a good point. you've seen a personnel change. when you have any campaign of this kind, it's incredibly high stake, high pressure environment. i think mitt romney -- i don't think it was the strongest interview he's ever given. i think that's part of the point. he has to do this. he has to do this more often. and one hopes from the perspective of the romney campaign, that he's going to get better each time. this is the first time out of the gate. if he's going to embrace a more out front strategy, he's going to have to get smoother, more polishes and have a more convincing story to tell. >> well, if you have an out front strategy, jim acosta pushed him on issue of tax returns here on cnn. i wanted to play what jim got him to say. >> i've already put out one year of tax returns. we'll put out the next year of tax returns as soon as the accountants have that ready. and that's what we're going to put out. i know that there will always be calls for more. we're putting out what is required, plus more that is not required.

those are the two years that people are going to have. that's all that's necessary for people to understand something about my finances. >> okay. made it very clear you're only getting two years. by the way, i, everybody, have the tax returns. everything that we have. it is a big stack. but how many months does it take? the guy's running for president. it's been three months after tax day. where are they? >> also, there's a precedent actually set by his father of 12 years of tax returns to really put it all out there. kill people with kindness. put it all out there. rather than dragging the feet, two years, and it makes it look like you're hiding something. >> it's an endless mystery in campaigns and government when you know you're going to have to do something, why don't they just do it and get it over with? assumi they're being rational, that mitt romney's going to be rational, it's hard to avoid the thought that maybe they don't want people to see what's on the tax returns and they're will to accept the pain of having to answer this question. this isn't going away because he gave this interview. you can hear this over and over till november.

your own father said anything less than 12 years is hiding something. why aren't you going to release it? and, you know, sooner or later he might have to but it's a real mystery as to why he isn't. >> why he would take that pain. >> yeah. >> rahim, what's your take on that, why only two years? >> i think he's trying to train the media and be very clear i'm not going to be able to give anything more than that. it's not clear that's actually going to work because frankly i think a lot of folks are bored by just talking about unemployment and the weak state of the economy and they'd much rather talk about something like this because it allows them to deep dive into it, it's very stimulating, it's a window into a lot of the ways the economy has changed. fodder for a lot of story. it's not clear when they made the right bet. i personally think it's pretty sensible of romney and the romney campaign to want to keep the focus on the economy and on unemployment but, again, they don't necessarily determine what the media's going to want from them. >> right, and plus they may want that and it may make sense. when people have an exception to

something, they're going to let it go. >> part of the strategy they've been use to date, the media, saying, we're not going to talk to the media. he used the phrase "train the media." we're not domesticated pets or circus animals. >> we are sort of like cats. >> are we like cats? >> i like cats and dogs and all the bad ways about cats. >> i don't -- i have to work on that metaphor. >> scratch, ignore what authority tell, you to do. all right. thanks to all three of you. we appreciate it. "outfront" next, a special report from miguel marquez, cold wars. shell oil one step closer to a multibillion-dollar plan to drill off the coast of alaska. does the risk of it add up? and why nerds rule, bringing one city to bended knee. you stay classy, san diego. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more.

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there. sure a lot of people make fun of the attendees. but they do not see the cold hard truth. comic-con is a financial powerhouse. which brings us to tonight's number. $162 million. according to the san diego convention and visitor's bureau. that's the amount of money that comic-con generates in san diego every single year. in addition to tickets and merchandise at the convention, you've got hotel, restaurant, grocery store, airports, all benefiting from that extra 100,000 people. all told, the convention generates $3 million in tax revenues every year. which is crucial for any city i financially destitute california. when organizers threatened to move the event, they offered subsidies, and it worked. the nerds have got san diego by the codpiece. it will remain a san diego event through 2015. up next, two men charged with conspiracy to smuggle items into iran, nuclear items. and why george zimmerman's lawyer wants the judge in the case removed and will he

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welcome back to the second half of "outfront." we start with stories we care about where we focus on our own reporting from the front lines. it was a great day for the market. stock soared by more than a percent. the dow is up by more than 200 points. best day of the month so far it ending a six-day losing streak. the reason was jpmorgan better than expected numbers. they earned money, despite that huge nearly $6 billion trading loss at the same time there was scandal over whether banks are manipulating the key interest rate called libor to which mortgages and credit cards are linked. tim geithner, who at the time was the president of the new york federal reserve, thought something was amiss with this rate as far back in 2008. he wrote about ways to prevent banks from manipulating libor rates. he said among other things they could establish a credible reporting procedure.

it looks like that fell on deaf ears. visa, mastercard and banks that issue credit cards, including bank of america and jpmorgan havagreed to a $7.25 billion settlement with merchants. in statement, visa said it agreed to pay $4.4 billion. mastercard will pay about $800 million. both companies will also reduce their swipe fees for a period of time. retailers had accused those credit card companies of basically fixing the fee that they charge for processing credit and debit card payments. there are new satellite images tonight that show more activity at a north korea nuclear facility. this picture you're looking at was taken on june 24th. construction evolving at the lightwater reactor. an analyst told our security team they think the image shows new components have been added to the reactor building, including a traveling crane.

that would likely assist in mounting a reactor dome. an uz beck national has been sentenced to prison for threatening to kill president obama. he faced a sentence of up to 30 years. he pled guilty in february. he's already served one year in prison. his lawyer, lance bell, told "outfront" that, considering the charges, they're happy with the outcome. and the man looks forward to serving his time and being reunited with his family in uzbekistan. some might be shocked you could get such a short sentence for planning to assassinate the president of the united states. it has been 344 days since the u.s. lost its top credit rating. the sentiment number is based on two things. one is how you feel about how your current situation is economically. the future is really all that matters because it's directly correlated with how much you spend, how much you hire. in short, that's all that matters.

an economist we spoke with today said that number was the weakest part of today's overall headline. and that's a bad sign. our third story "outfront." two men indicted on charges of trying to obtain nuclear materials from the united states and export them to iran. intelligence correspondent suzanne kelly has the story. she joins me tonight. what exactly were they smuggling and who were these men? >> reporter: aluminum alloy rods, mass spectrometers. vacuum pumps perhaps. obviously, the most disturbing, radioactive source materials, erin. this indictment lays out fascinating detail about how the suspects allegedly planned to actually find these materials in the u.s., take them through the philippines, and then get them into iran. according to prosecutors, they were trying to set up sort of a front business in the philippines in order to do this. then they were trying to get an undercover agent to help them get these things into iran. now, pervise khaki is a citizen of iran. and jong chang li is a resident of china. both of them filtering all of

this through the philippines. once again, the end game was essentially to get these material, get their hands on them from the u.s., have them shipped to the philippines and work their way into iran nuclear materials, erin. >> suzanne, when you look at this, it's a complicated scheme. do you know how common these efforts are, to basically set up a front company, anything to try to transit nuclear materials from -- it's amazing this time it was from the u.s. from the u.s. or elsewhere into iran? >> it didn't really make sense but we got more detail on this. who warned that iranian procurement networks continue to target u.s. and western companies for technology acquisition by using fraud, front companies and middlemen in nations around the globe. now, this was an immigration and customs enforcement investigation. an i.c.e. director described this particular case as a complex conspiracy to deliver nuclear materials to iran. and a significant threat to national security. >> final key question, did any

of this material get into iran in this case? >> great question. a law enforcement source tells cnn officials aren't in the position to say whether all those materials made it through. according to the indictment, we know the lathes made it in. as far as the materials that are the most dangerous, officials cannot say whether or not those made it into iran. >> suzanne kelly, thank you very much. now our fourth story "outfront." tonight, nearly 2 dozen ships are headed to the icy waters off the arctic in search of treasure. shell oil has bet billions and billions that there is a bonanza of oil there. at stake is a gold rush to drill in the arctic. literally, who owns it, who can own the oil underneath it. this is an incredibly harsh place, though, to operate. there are huge risks. it's amazingly expensive. miguel marquez went to far northern alaska. it's a major series for us which begins tonight to see if all

this adds up. >> reporter: it is a massive gamble. if it pays, shell oil will reap the benefit of being the first to establish a new market for oil in one of the harshest climates on earth. >> we will be drilling these wells like they are the most complex, most difficult wells we've drilled in company history. >> reporter: the plan to sink two exploration wells into arctic waters. one in the beufort sea, the other in the chukchi. at least 26 billion barrels of black gold. enough to supply 10% of america's energy needs. >> if shell really hits something this summer, then i think things will heat up more. >> reporter: it's going to be a gold rush for oil? >> it will be an undersea gold rush for oil. >> reporter: but some of the native people who live here fear in the oil starts to flow their way of life could be threatened. >> our subsistence for the

winter, it all come from the ocean, the fish and the whale. it's going to ruin our ocean. >> reporter: this woman has lived in this tiny eskimo community her entire life. she's doing what she's done for years. preparing a seal skin to be made into winter boots or mutlooks as they call them here. >> when you're 79 years old, you don't move like a young lady, but you have to keep on working on these skins. >> reporter: she, like everyone else here, uses every bit of the animal. same goes for walruses and especially whales. the people here still get by mostly like they've done for thousands of years, surviving the brutal winter by hunting whales and other sea animals during the short, but intense, summer. the winter here, a much different story. the winds can blow at hurricane

strength. the ice can move like a freight train, weighing a million tons. an unforgiving and rapidly changing climate. this is the point of point hope. it separates the bering sea there from the chutchi sea there, about 90 miles that way, that's where shell hopes to drill this summer. towards the bering sea, in this short time, the weather has changed enormously. it's a story we've heard before. tradition and culture threatened by change, modern life and necessity. this time, the stakes couldn't be higher. oil that could help power an american boom. pitted against the way of life for people living on the edge. >> miguel is here with me tonight. shell is saying it's tens of thousands of jobs. it's a lot of money for the local population. are people, great, let's go, or no? >> some of them are. the borough of barrow, big northwestern slope of alaska, and barrow itself, they're all for it.

there's eight towns in this borough. some of them are for it. point hope really holds on to its culture. very concerned about what will happen if a spill happens and the tide brings the oil back to their shores. >> 55 to 100,000 jobs. >> if what is down there what they think is down there, it would be massive. >> this is part of a major series you worked on. you spent a lot of time looking into the story. what are some other stories you have? >> we'll look at the technology. the impact on the ecosystem. this is a very harsh place but incredibly fragile at the same time. we're going to look at the impact on the eskimos. essentially, the big thing is how -- if shell finds what they think is down there, how are they going to get it out? it's going to be an unbelievable 10 or 20 years.

the other thing that's amazing is they're in for $4.5 billion now. before they even withdraw a drop of oil, they will have spent between $10 billion and $20 billion. incredible. >> wow, really is. thanks very much to miguel. we're going to have that special series all next week "outfront." now, new developments in the case against george zimmerman. the defense attorney has filed a motion to disqualify the judge. kenneth lester is his name. mark o'meara says he's biased against zimmerman. he said this after he made what is called gratuitous remarks in his bail order last week. under any definition, the defendant has flouted the system. and, i quote again, the defendant has tried to manipulate the system when he has been presented the opportunity to do so. those and other remarks are what the defense says will prevent zimmerman from getting a fair trial. senior analyst mark neham is out front. flouted the system and manipulated the system, do you agree with mark o'meara?

>> i think it's a fair comment from a court who's evaluating the evidence. you can't throw a judge off every time you disagree with him because basically you'd have half the judges thrown off at any given time because somebody typically is going to be on the other side. the fact is the question will be did the judge go too far that he's biased? i don't think he's biased at all. for the defense to claim that, down the line in the event there's an appeal, you have to first raise it. if it's not raised in this forum, then it's forever waived. the defense has no option if they truly believe in good faith -- believe what they've alleged -- >> you know this judge personally, right? >> i know the judge. i know the defense lawyer. yes, i know them all. for a long time. >> so you believe when you look at this person, mr. lester, his integrity, the way he would handle this, you think he's fair?

>> i think he's without reproach. i think he did go pretty far in that order. they're claiming the judge went further than he needed to go. he could have simply granted the bond and moved on. but the judge interpreted a lot things. basically, he said that he believed zimmerman was going to flee because of the dishonesty he associated with the moneys that were obviously in a fund that were not disclosed to the court. so the judge took some leaps there. but i think that's within his right to do so. >> so who decides? mark o'meara makes the motion, but who decides whether the judge stays or go? >> the judge. >> the judge? >> you may remember the judge who first got off the case. you basically get one free bite of the apple. the second one, the judge basically has to agree with the motion. if the judge doesn't agree, then the remedy for the defense is to take it to an appellate court on a petition and go to the appellate court, which here is in daytona. my partner assisted me on this to get this ready for you all.

basically, they will make a determination whether the judge is -- they'll be looking at the facts to see if the judge shows bias. there's an assumption of correctness in the judge's order. it's hard to overturn. >> let's just say the judge remains on this case. and now the -- george zimmerman's attorney is asked to be removed. doesn't this put george zimmerman's entire case at a disadvantage? the judge, if he doesn't already dislike him would, even if he didn't want to be biased, he obviously would have reason to be, even if kind of in the back of his mind -- >> you know, i don't think so. we can fight against each other. we can be in trial against each other for a week and we can be duking it out and then go out to dinner with each other. it's just the way you're set up when you do this. and none of this is personal. so i didn't hear any -- i didn't see any personal attacks on the judge. i simply said what i heard and

what i read is basically that there was a suggestion that in light of the judge's ruling that they believe there's bias. they filed their motion. it wasn't a personal attack. it was a little motion that suggested that the judge was biased. i don't think there will be anything lingering. i don't think it's going to impact it one way or another. next, immigration officials make a move that seems to defy both the obama administration and marco rubio. so what's going on here? and this one. if you're superstition about black cats or friday the 13th, you could be losing money.

>> we're back to our outer circle. we begin tonight in syria where american officials tell cnn they believe syria has been moving some chemical weapon stockpiles in the past few days. the news comes just a day after reports of a new massacre in central syria, which opposition leaders say made yesterday the bloodiest day of fighting since the uprising began. i asked how syrians are reacting. >> reporter: blaming the syrian government for what they say is a massacre. they say that hundreds of people were killed in that village on thursday, that it was the deadliest single day in syria since the uprising began 16 months ago. now, on friday, outrage in syria wasn't just being directed towards the syrian government. we heard reports of many demonstrations happening across the country and in many of those

demonstration, activists were calling for the removal of kofi annan as the special envoy to syria. they are outraged they say neither the u.n. observer mission, nor kofi annan, have been able to effectively do anything to stop the bloodshed, the violence and the continued crackdown that's been going on in syria. erin. >> thanks, mohammed jamjoom. now beijing. china announced its economy is only growing at 7.6%. you might say that's fast. 7.6%. the problem is, it's not for china. and right now, as goes china goes the world. gordon chang, author of "the coming collapse of china" tells me it is even worse than this indicates. stan grant tells us why china's news is so bad for us. >> reporter: the lowest growth in three years. this is not just going to be a worry for china. this is going to send a bit of a shiver through the rest of the world as well. u.s., europe, other big markets affected by the global financial crisis.

china has remained one of the real bright spots. the real engine of growth for the world economy. now, there are signs china's growth engines are starting to peter out. it's no longer exporting as much. it can't continue to rely on endless investment. somehow, they have to get people here spending. they have to find ways to boost consumption. all of this happening as it tries to engineer a steady transition of power at the top of the communist party. there are real worries here. not just for the economy but for social stability as well. erin. two sisters in miami facing deportation after the department of homeland security wants their case thrown out of court. they came to the u.s. as toddlers and have been living in america ever since. daniella became the face of the dream act back in march when she was almost deported back to her native of colombia. marco rubio intervened on her

behalf and president obama announced last month that he wouldn't deport high school graduates who are in the country illegally. she and her sister earned a two-year reprieve from deportation, but now it appears the department of homeland security wants their appeal to stay in the country thrown out. we appreciate both of you taking the time. the letter from homeland security, i have the first page of it talking about you and your sister, the headline in removal proceedings. what was your reaction when you got this? did you even understand what it meant at first? >> at first i had no idea what it meant. then i had coincidentally been with my lawyer at the same time, and she was able to explain to me how they were in opposition to our appeal. >> and so explain to me if you could "opposition to the appeal." does this mean simply the dhs would deport daniela and diana? >> well, not immediately.

the two-year reprieve that they won from i.c.e., which is another agency of the department of homeland security, stands, it remains intact. they still have here until march 2014. the problem is the department of homeland security through its chief counsel locally in maim, moved to request that the board of immigration appeals that their appeal be dismissed. basically, they're protesting the deportation order entered by the immigration judge remains. that they affirm the decision of the immigration judge. and they oppose to the relief. so that's where we stand, meaning that in two years from now, when the reprieve expires, they will have to leave. >> okay. so this -- basically what this means is in two years, you're done. you got this and you're going to have to leave. all right. so let me just give some context to viewers. because obviously, this does fly in the face of the president's highly public defense of people exactly like daniela. here's what the president had to say.

>> effective immediately, the department of homeland security is taking steps to lift the shadow of deportation from these young people. over the next few month, eligible individuals who do not present a risk to national security or public safety will be able to request temporary relief from deportation proceedings. >> daniela, obviously, you have temporary relief, just those two years. but do you feel the president is being hypocritical, saying that while his dhs sends you a letter saying as soon as your two years are over, you're done, you're out? >> exactly. that's the root of my frustration and my anger. because here you have the president, who is your boss, telling you not to -- not to interfere in any way with the legal proceedings of kids like myself, and yet the dhs local office did something completely opposite of what your boss just finish saying. >> the question is, does he really mean what he's saying. let me bring in david leopold. he's an immigration attorney.

david was the former president of the american immigration lawyer association. we called dhs. they refused to comment on daniela's case. saying go call immigration and customs. they sort of are trying to punt on the whole situation. but explain to me this. how can dhs send this letter, given what the president has said? >> erin, what they've done is they've filed a brief. let me tell you something, daniela is very lucky. she's an outstanding woman from everything i can see. and she's exactly the type of person that the president is protecting with the policy that he announced last month. i'm not sure i understand what she's complaining about and what her attorney's upset about. there is nothing that i've seen, nothing that i've read, which indicates that she's going to be out of the country in two years. quite to the contrary, she's the first one. she got granted the reprieve in march. she's the first one probably in the country to get this.

so they ought to be applauding president obama and this great initiative. >> all right, nira, please respond. >> of course, of course. and i disagree. basically what's happening here is there's contradictions between what the president said and what the agencies of the department of homeland security are doing. clearly, the chief counsel in miami is going against what the president said. they're basically saying in that brief, we are opposing to any relief that these sisters are seeking. board of appeals don't even look at -- >> erin, that's absolutely not true. >> oh, yes it is, you haven't read the brief. >> with all due respect, what's going on here is you've got a legal position. that's not going to change. a lot of folks say the president needs to follow the law. and the president is following the law. the government is following the law. >> we, i'm sorry -- >> wait a minute -- >> -- saying i'm not going to kick people out of the country if they're good citizens and graduate from high school. now they're saying in two years she has to leave. >> they're not saying that though.

>> that's exactly the problem, erin. >> there not saying that. >> because this say policy and it's not a law. it's not been implemented correctly. >> you know what we need, erin -- >> there is a broken chain of communication in the department of homeland security. because they have to implement the policy the way the president is saying. >> okay -- >> actually, actually there's not a broken chain of communication. there's a good chain of communication. she got the action two months ago. she got deferred action two months ago. she's in a great position. she's going to go to dartmouth in the fall. she's not going to get deported in two years. i think what we need in this country right now is we need community leadership. we need people to explain what this policy really is. we don't need fearmongering. and that's what's going on here tonight unfortunately. is outstanding as daniela is, she's not being well served by doing this. and i think what we need to do is explain to our communities exactly what the president has done. this is a bold initiative.

a lot of young folks are going to benefit from this. the best and the brightest folks just like daniela. and i think the president ought to be applauded tonight. >> all right, you can add and then i want to ask something to daniela. >> yes. the law doesn't say that the department of homeland security has to file a brief, requesting the board of appeals to affirm the decision of the immigration judge. they could have chosen to let her fight for her case and they did not. >> you're still heading to college in the fall, right? >> yes, as of now, yeah. >> she'll be in college in the fall. she's going to have a great future. >> i appreciate -- >> yeah, and then after two years, she's going to have to go back. >> not the case. >> thanks to all three of you. we have to leave it there. everyone have a wonderful weekend. it isn't just your annual exam. it's your daughter's wedding. did you know with your health insurance you may now have some preventive benefits

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