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Lou Dobbs Moneyline
U.S. Military Strategy in Afghanistan; A Discussion with Saudi Prince Alwaleed
Aired October 11, 2001 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Good evening.
It has been one month since the terrorist attacks against the United States. And today, Americans pause to honor those killed in those attacks, even as U.S. aircraft rain bombs down on the Taliban and al Qaeda network in Afghanistan. On day five of those air strikes, U.S. warplanes dropped cluster bombs near a military academy on to artillery units and suspected terrorist camps, and rocked Kabul's airport with a heavy barrage of bombs.
Tonight, we'll have an exclusive interview with Saudi Arabian Prince Alwaleed. He is one of the world's wealthiest men, a major investor in companies all around the world. We'll hear from the prince on the role that his country is playing in the war against terrorism. And we'll tell you why his $10 million check for victims of the World Trade Center tragedy was rejected by Mayor Giuliani.
In Florida, a third case of anthrax has been discovered. We'll have a live report you with the very latest.
And on Wall Street today, stocks surged following encouraging earnings reports from Dow heavyweight General Electric.
And joining us tonight to discuss U.S. military strategy, former Defense Secretary William Cohen and Richard Perle, the former assistant director of defense under Ronald Reagan, one of the foremost defense policy thinkers in the country.
Now for latest in the war against terrorism, the FBI is warning that additional terrorist attacks may take place in the United States or against U.S. targets overseas in the next several days. The FBI says the warning is prompted by certain information, but that it is not target specific.
U.S. F-14 jets could be seen streaking across the skies of Afghanistan today as the air strikes entered their fifth day. Once again, Kabul and Jalalabad received a lot of attention -- the Pentagon also releasing some of the first video of air defense sites being hit by those fighter jets during the second day of attacks.
A U.S. Air Force sergeant was killed in an accident in Qatar today in the first confirmed death in Operation Enduring Freedom.
And today, the president attended a memorial for the men and women who died in the attack on the Pentagon a month ago.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: To all of you who lost someone here, I want to say: You are not alone. The American people will never forget the cruelty that was done here and in New York and in the sky over Pennsylvania.
(END VIDEO CLIP)
DOBBS: And tonight, President Bush will talk about the latest developments in the war against terrorism during a news conference that will be held this evening. CNN, of course, will carry that news conference live. It begins at 8:00 tonight, Eastern time; 250 miles away, in New York City, bagpipes played near the smoldering wreckage of the World Trade Center. Hundreds of rescue-and-recovery workers joined Mayor Rudolph Giuliani and the city's police and fire commissioners at that memorial service.
The Pakistani government is worried tonight about tens of thousands of Afghan refugees who are trying to cross into Pakistan. Officially, those borders are closed.
For more now, we go to John Vause in Islamabad, Pakistan -- John.
JOHN VAUSE, CNN CORRESPONDENT: Well, Lou, as you say, tens of thousands of refugees making their way to the Pakistan border from Afghanistan, fleeing those raids, which are now taking place pretty much around the clock at the moment.
As we know, a few hours ago, the attacks on Kandahar and the capital, Kabul, were ongoing. We know that, earlier today, some residents of Kandahar, which has been very heavily hit, were making that 100-mile journey from Kandahar to the Pakistani border -- not an easy journey and an expensive one -- reports that it can cost anything up to $600 to get a car to make that journey. And once they get to here, there are no guaranties for them.
We also know that the United States is pretty much using a full range of weapons now: cluster bombs and special bombs, which are designed to penetrate bunkers. Claiming air supremacy, they're pretty much launching these raids at will.
As for casualties, the only word on casualties is coming from the Taliban ambassador here in Islamabad. He says that at least 140 civilians have been killed in these raids so far. But, obviously, those reports are yet to be confirmed.
The U.N. today told us that they are having huge problems getting aid into Afghanistan, problems which have been ongoing -- but a new problem today: The Taliban has stopped at least one shipment of food aid, demanding a tax of $32 dollar per ton, a Taliban tax, if you like. The U.N. officials here say they are now trying to talk with the Taliban leadership to try and come to some arrangement to get this food to the people that need it the most. Also at that press conference with the Taliban ambassador I mentioned earlier, a very ominous statement -- he said: When the Americans enter Afghanistan, that is when the war will begin -- Lou.
DOBBS: And, John, in terms of the war beginning -- which it obviously already has -- it began on September 11 -- the skirmishes along the border between Pakistan and Afghanistan -- two reported earlier -- have there been further skirmishes?
VAUSE: Nothing reported, but the thing to keep in mind, we only got the reports of those skirmishes several days after they happened. But the important note is that those skirmishes have happened in the past. They are not uncommon.
As far as the helicopters, there were five helicopters which approached Pakistani airspace earlier this week. They all turned around. They did not land. We heard about the skirmishes with the members of the Taliban. They were turned back by Pakistani security forces after an exchange of gunfire. But just because we haven't heard about it does not mean that it hasn't happened. Getting information out of that part of world is extremely difficult and very slow -- Lou.
DOBBS: John, thank you for speeding it up as best you can -- John Vause from Islamabad, Pakistan.
Well, in Florida, yet another case of anthrax has been discovered and confirmed. Now the FBI is calling this a criminal investigation.
John Zarrella is in Boca Raton. He has the very latest for us in that case -- John.
JOHN ZARRELLA, CNN CORRESPONDENT: Lou, in fact, it was confirmed last night, late last night. But it is anthrax exposure. It is not full-blown anthrax. It is a woman, a 35-year-old woman, who remains unidentified, who also worked at American Media, the building behind us here.
Now, all day, the federal law enforcement agents and Centers for Disease Control health officials had been pouring through that building. And the reason they went back inside -- originally, they thought they might be finished within a couple of days ago. But it was after news of the third exposure case that they decided to go back in, take another look.
You can see them in the white hazardous-materials suits and the face masks on as they went in and out of the building all day -- teams of four to six working in the building. We saw them at one point bringing out what appeared to be boxes of some sort of materials -- but, of course, no idea what that would be.
Now, late this afternoon, just a little a while ago, in fact, federal law enforcement officials confirmed to CNN that they had, in fact, finished the work inside the building. And they are not going to be doing any more work inside that building unless there's another reason to go in. They haven't cleared the building yet. And we do not know what, if anything, or any new additional anthrax spores they might have found in there. But, at this point, they have finished the work at American Media.
This is John Zarrella, reporting live from Boca Raton, Florida -- Lou.
DOBBS: John, thank you very much.
Well, banks all around the world are choking off Osama bin Laden's money supply; $28 million in assets have now been frozen or seized; 62 nations have issued orders to block al Qaeda's funds.
Allan Dodds Frank reports on the deep financial ties between Osama bin Laden and the Taliban.
(BEGIN VIDEOTAPE)
ALLAN DODDS FRANK, CNN CORRESPONDENT (voice-over): Since the September 11 attacks, U.S. intelligence agencies have told the president that Osama bin Laden, in effect, owns the Taliban, his grip cemented by about $100 million in cash and military equipment his al Qaeda organization has provided to the Taliban during the last five years.
Details of bin Laden's finances, as well as the $100 million figure first reported by "The Washington Post," have been provided to CNN by government sources. Tens of millions of dollars have been traced through various forms of money transfers to bin Laden links.
After arriving in Afghanistan, he quickly provided the Taliban, then tightening their hold on the country, with a $3 million payment. Sources say much of the money he gives the Taliban comes from illegal activities. Start with extortion. U.S. government sources say rich Arab businessmen and rulers pay off al Qaeda to avoid having business disrupted.
SEN. JOHN KERRY (D), MASSACHUSETTS: A number of wealthy people have effectively paid protection to Osama bin Laden, not unlike protection money to organized crime.
FRANK: Then there are bin Laden charity fronts, which swindle often unwitting donors, who believe they are giving donations to Muslim refugees.
WILLIAM WECHSLER, FORMER NATIONAL SECRETARY COUNCIL MEMBER: The money that is used for terrorism, most importantly is still being raised. It's still being solicited from people throughout the Muslim world. It's still being raised under the guise of charitable organizations. It's still coming from business enterprises, some legitimate, some illegitimate.
FRANK: Such as al Qaeda's protection of Afghanistan's heroin production.
(END VIDEOTAPE) FRANK: The United States seems to be getting a better handle on Osama bin Laden's finances. But since September 11, the efforts by 102 countries to find the money have frozen just $28 million belonging to al Qaeda and the Taliban. That's not very much money -- Lou.
DOBBS: But significant progress over what was.
FRANK: It certainly is.
DOBBS: Allan, thank you very much -- Allan Dodds Frank.
Well, Richard Perle is one of the foremost defense policy thinkers in the country. He is the former assistant defense secretary in the Reagan administration, now chairman of the U.S. Policy Board, a consultant to the secretary of defense. Mr. Perle says the United States is sending a message now to those supporting terrorists. The message is three simple words: You are next.
Richard Perle, good to have you with us here on MONEYLINE.
RICHARD PERLE, AMERICAN ENTERPRISE INSTITUTE: It's a pleasure, Lou.
DOBBS: Your best assessment of how these strikes are going to this point.
PERLE: Well, it's very early in what the president and others have said, rightly, will be a long campaign, a long struggle, only part of which is going to take place in Afghanistan. But I think the ground has been prepared and will continue to be prepared for what ultimately must be the destruction of the Taliban regime. If we fail to do that, we will have failed in the first major engagement of this rather long war.
DOBBS: Well, the president says we will not fail. And in terms of the next steps, reports that we will be using special operation forces, helicopters, and taking the war to the Taliban directly, how -- what is your best judgment as to when the would begin?
PERLE: Well, it is difficult to say. It will depend very much on when others with whom we are working are well positioned to succeed.
The important point is that the objective is the Taliban regime and not Osama bin Laden himself. It would be a great mistake to reduce the even this first phase of the war on terrorism to a manhunt for Osama bin Laden. If we are successful in destroying the regime that has supported bin Laden, the message to other regimes who are supporting networks of terrorism is very clear. And that's what I have in mind when I say: You're next.
DOBBS: But in terms of Osama bin Laden, the president himself saying, "wanted dead or alive," casting with those words Osama bin Laden squarely in the crosshairs, if you will, of the U.S. retaliation, does this represent a significant shift in thinking on the part, do you think, of the administration? PERLE: I think it was a colorful way of indicating how we feel about Osama bin Laden. But it certainly is not inconsistent with everything the president has said, from his earliest statement, when he said we will not distinguish between terrorists and the states that harbor them, to his eloquent speech to a joint session of Congress in which he placed the emphasis on those who harbor terrorists.
One has to look at the production of terrorists as the output of a factory. If we go after the output and not the factories, there will be a continuous production of terrorists, in the hundreds, perhaps in the thousands. And that is an unmanageable threat to our security. We can't deal with that by homeland defense alone. So we have got to destroy the factories that are turning out these suicidal terrorists.
DOBBS: According, Richard, to every survey I've seen and what I sense in the way of public opinion, most Americans, after witnessing those attacks that cost 6,000 innocent lives, want the production; they want the factory; they want the goods. And they want Osama bin Laden as well.
PERLE: I think they are quite right. If we don't get all of those things, we will continue to be faced with a terrorist threat, which was present before September 11 and not taken seriously enough.
Secretary Cohen, who I think is going to appear later in the program, made a dramatic plea for taking this seriously when he was secretary of defense. Now we're taking it seriously. And it's rather late. But we mustn't fail to recognize that it could be worse. And, therefore, we mustn't let up until we have succeeded. And that means getting countries out of the business of supporting terror.
DOBBS: No matter where they may be.
PERLE: No matter where they may be.
I don't think we have to go after all of them militarily, because, up until now, there has been no cost attached to supporting terror. Once countries see that it can expensive, because their own regimes may come under attack, I think a number of them will stop their support for terrorism, because they don't get very much out of it.
But even meager rewards were not offset by any costs at all. So we now need to impose prohibitive costs on the business of supporting networks of terror. And we have got to be dealing with places like Iraq, Iran, Yemen, Sudan still, Syria, parts of Lebanon that are under Syrian control and Lebanon itself. All of these countries are actively supporting systems of terror. And the message to all of them has to be: Get out of this business.
DOBBS: And each of those, as you suggested, are potential targets of retribution for being in the terrorism business, correct?
PERLE: They absolutely are. If we stop short, if we leave the factories in place, they will turn out other terrorist and there will be other attacks, and potentially even more desperate attacks using even more lethal weapons than we saw on the 11th of September.
DOBBS: Richard Perle, thanks for being with us.
PERLE: A pleasure.
DOBBS: Coming up next here: the latest developments in the war against terrorism: cluster bombs, bunker busters blasting away at terrorist targets in Afghanistan. We'll be talking about the military strategy and future steps with former Defense Secretary, MONEYLINE contributor William Cohen.
We will also have an exclusive interview with Saudi Arabian Prince Alwaleed on his country's role in the Middle East in the war against terrorism. And we'll tell you why his $10 million check today was rejected by New York City -- all of that coming right up on MONEYLINE.
ANNOUNCER: Next on MONEYLINE: One of the world's wealthiest men talked with Lou about terrorism, Afghanistan and the United States' policy in the Middle East, Prince Alwaleed, whose $10 million gift to the victims of the World Trade Center may be declined because of his political views.
(COMMERCIAL BREAK)
DOBBS: An angry response in New York City to a donation by Saudi Prince Alwaleed, the prince giving a $10 million check to the victims of the World Trade Center tragedy. But he also, at the same time, criticized U.S. policy in the Middle East. And that brought a sharp rebuke from Mayor Rudy Giuliani, who, late today, refused to take the prince's check. Prince Alwaleed is one of the wealthiest men in the world. He is also one of the world's most important investors.
Earlier today, I asked the prince about his view of the world economy.
(BEGIN VIDEOTAPE)
PRINCE ALWALEED, SAUDI ARABIA: I feel that, inevitably, the world is going to enter into recession. The hope is that it will be short-lived. With all the monetary stimulus that the United States has right now and all the fiscal stimulus we talk about right now, I hope this will jump-start the economy sometime next year.
It's very difficult to predict that, because there are so many variables right now besides the economy, which is (UNINTELLIGIBLE)
DOBBS: As one who works and lives in the broader world, not just in the West, nor within Islam, what do you think is going to be required here to eradicate terrorism?
PRINCE ALWALEED: Get bin Laden, as Mr. Bush said, dead or live. And, as for the objective of trying to eradicate terrorism, or at least diminish it in a substantial manner, it's very important for the United States to really dig deep into the roots and the motives of those terrorist acts, although we are against them completely. But there are some resentments in the Arab world and the Islamic world in general toward the United States. And I see there are many articles in the U.S. newspapers and magazines that talk about this, the deep- rooted resentments that
(CROSSTALK)
DOBBS: Are you speaking of U.S. support for Israel, the quest for a Palestinian state?
PRINCE ALWALEED: Look, in the Arab world, there's a lot of good feelings toward the United States, no doubt about that. However, America's blind alliance and favoritism to Israel is not helping a lot, because you have to understand that those Arab people watch Palestinians every day being slaughtered in the tents.
And they believe that, really, the United States is the main backer of Israel in what's going on. And they believe America could play a big role, if not the crucial role, in having the Israelis begin accepting and implementing the 242 and 338 resolutions of the U.N.
DOBBS: But surely you appreciate the fact that, given the terrorist attacks on the United States on September 11, that whatever the incentives or the desires of the U.S. government vis-a-vis the Palestinian people or, specifically, the Middle East, that will all fall secondary to the eradication of terrorists and those who support them.
PRINCE ALWALEED: Oh, for sure. We're not saying you have to resolve this matter tomorrow morning.
What we are saying right now -- and we understand your pain very well -- that the United States right now -- the United States's main objective right now is to look at these perpetrators, get them to justice. We accept this one.
Actually, yesterday, the Organization of the Islamic Conference met, 56 countries from all the Islamic world, including all the Arab nations that are including in that conference, they all supported the U.S. move as far as it is linked to getting Taliban and bin Laden to justice.
However, eventually, this problem, if not eradicated, it will get out of control. But what the Arab world is asking America is to give more attention to the Palestinian cause.
DOBBS: The idea that there could be linkage in the context of this war against terrorism now to both the creation of a Palestinian state, which the Bush administration says it was considering prior to September 11; the idea that there could be a shift in U.S. policy, certainly it's understood that that -- whether it was the desire or not of the U.S. government, it could not happen because it would be seen by the world as acquiescence to terrorism.
PRINCE ALWALEED: Well, the Bush administration has already publicly said that this issue of discussing the potential of having a Palestinian state being established and the territories designated by the U.N., they already have said publicly that this idea and this philosophy was discussed pre-11 September attack.
So already this issue of having them surrender to terrorism is not on the table. And I think if you do something out of principle, you should do it. For example, I have some people telling me, you shouldn't have come to America right now. You know, you are risking your life and you're risking the fact that you're exposing yourself to America.
My answer was that if I believe in something, if my conscience says, do something, I'm going to do it regardless of any fears here or there. If you believe something, you should do it. No matter what the linkage will be there here or there.
DOBBS: You understand what you're saying is very unpopular in this country right now.
PRINCE ALWALEED: What?
DOBBS: Suggesting support for a Palestinian state, suggesting abandoning a longstanding relationship with Israel.
PRINCE ALWALEED: Mr. Bush publicly came out and said that the policy of the United States is to have a Palestinian state, and not to be against it. He said that publicly, I think. In his communications with almost all the leaders of the Arab world, and especially Prince Abdullah, the crown prince of Saudi Arabia, he assured him that our policy will be to look at the Palestinian cause in general and the stated policy of the United States is to have, eventually, a Palestinian state. So if that's the case, that's the stated objective of America, why don't you work towards that?
DOBBS: And the idea of a realignment with Israel; do you really think there is any way in the world that makes either good geopolitical sense...
PRINCE ALWALEED: They are not mutually exclusive. You can keep relationship with Israel as much as you want, but give the Palestinians their rights.
You know, I am saying this; I'm for America. I'm here the assist America and to show my alliance with America. But yet I'm counseling America to do what's best for America from the eyes of Middle Eastern Arabs and Islamic world. See, I'm giving perspective from downtown Riyadh.
DOBBS: In terms of the eradication of the Taliban and the al Qaeda network, the Saudi government has been criticized by the Bush administration for not being sufficiently cooperative, for not freezing the assets of bin Laden, for not doing more in cooperation with the investigation. Why would that be? PRINCE ALWALEED: Well, this is a very incorrect statement because honestly, just a week ago Mr. Rumsfeld, the defense secretary, was in Saudi Arabia. He met the king, he met the conference, he met high ranking officials in Saudi Arabia. And they were in complete consensus about what's needed from Saudi Arabia. So I'd segue that statement; I mean, what we need to say is we are in complete sync with what the United States wants to do.
DOBBS: And you're confident that Saudi Arabia has -- and I'm not speaking militarily, but I'm talking in terms of the sharing of intelligence information, the freezing of financial assets of Osama bin Laden -- you're confident that the Saudi government has done all that it...
PRINCE ALWALEED: Not only that -- you know, I was a banker, also. (UNINTELLIGIBLE) bank in Saudi Arabia.
DOBBS: Some would say you still are.
PRINCE ALWALEED: No, that bank merged with the -- a fleet of city bank in Saudi Arabia called Saudi American Bank.
So we are very stick-to-it in Saudi Arabia about this. And I can assure you that bin Laden has no accounts whatever in Saudi Arabia. Although he came from Saudi Arabia, his nationality was stripped from him a long time ago when he began taking those terrorist acts against not only the United States, against Saudi Arabia also.
DOBBS: And quite a few other places as well.
PRINCE ALWALEED: And many other places, sure. So he's a renegade, not only against Saudi Arabia or Islam, he's a renegade against the whole world.
DOBBS: The criticism that has emanated from many corners is that the Muslim religion, it's leaders, the leaders of states in which the Muslim religion is predominant have not been strong enough in their condemnation of either bin Laden, the al Qaeda, or terrorism itself. How do you think about that?
PRINCE ALWALEED: Yesterday the organization of Islamic conference met; 56 states, including the old Arab nations are among them. And they stated very openly and publicly that they are with the U.S. retaliation against Taliban and bin Laden. They said that very openly (UNINTELLIGIBLE) in all newspapers (UNINTELLIGIBLE). So that's the official position of the Arab world and Islamic world.
So it cannot be clearer than that. Now as for -- you know, you may see some demonstrations pro bin Laden; and I'll tell you that. They are not pro bin Laden, they are anti-American demonstrations. I mean, these people, they don't even know bin Laden. I mean, he is not their mother at all.
But they see in him the frustrations that were vented. Unfortunately, I am saying that. But at the end of the day, we have to look at the roots of the problem. You know, if Mr. Bush wants to be successful in eradicating this issue of terrorism, he has all right to go and hit them right now. I'm with him all the way. That's his right; and the IOC, which is the Islamic Organization Conference approved that, and I'm backing that, of course.
But eventually you have to look at the roots of the problem. You have to; there's no other choice. You know, these Muslims and Arabs in the Arab world are seeing their brothers being slaughtered every day in Palestine. Why? Just because Israel is being backed by the United States. Unfortunately, I have to say that very openly. And that's the fact of the matter. And it has been aired, and these matters have been told to Mr. Bush exactly by all the leaders who came here from the Arab world.
DOBBS: And the solution is?
PRINCE ALWALEED: The solution is for America to have on one hand, take its revenge, work on that front very aggressively like they're doing right now; get Taliban or bin Laden to justice. Prior to that, begin showing the Middle Eastern people, the Islamic world and the Palestinians, specifically, that it's taking real steps toward rectifying this major problem that we have in the Middle East.
And President Bush began by saying -- began this process by saying that we accept Palestinian states in the Middle East. And that's a big move. It has been applauded in the Arab world.
DOBBS: Thank you very much.
PRINCE ALWALEED: Thank you, Lou.
(END VIDEOTAPE)
DOBBS: Saudi Prince Alwaleed
Coming up next here on MONEYLINE, we'll have the very latest for you on the airstrikes against the al Qaeda network and Taliban targets in Afghanistan; we'll bring you up to date. Also, the nation's employment market showing surprising strength; we'll have the good news on that for you when MONEYLINE continues.
(COMMERCIAL BREAK)
DOBBS: Even before the terrorist attacks against the United States on September 11, roughly a third of the states had to deal with budget shortfalls in this fiscal year, something that hasn't happened in nearly a decade. And now, the situation is worsening.
Tim O'Brien reports from Washington.
(BEGIN VIDEOTAPE)
TIM O'BRIEN, CNN CORRESPONDENT (voice-over): For years, nothing has been more symbolic of Florida's tourism boom than Disney World. Today, it is a stark symbol of the economic costs of last month's terrorism. The decline in tourism, particularly in the last month, is cited as a principle reason for Florida's $1.5 billion budget shortfall.
JEB BUSH, GOVERNOR, FLORIDA: Today, I'd like to announce that we're formally calling the legislature into special session.
O'BRIEN: You'd expect states that thrive on tourism, like Florida, Hawaii and Nevada to be hurt when travelers stop flying. But all states are affected when consumers stop buying, as they did after the September 11 strikes. Revenue from sales taxes plummeted.
ROY SCHEPPACH, EX. DIR., NAT'L GOVERNORS: Well, it was really across the board. I mean the -- we do have some results now for September revenues. And there's a significant number of states that lost, you know, 7, 8, 10, even 15 percent of their revenues for that particular month.
O'BRIEN: That could offset any benefits from the economic stimulus package now working its way through Congress. And there is apprehension the President's proposed tax cuts for individuals and business could drain state revenues even further.
CARL TUBBESING, NAT'L CONF. OF STATE LEGISLATURE: Because the state income taxes are so closely tied to the federal income tax. So many of them sort of piggyback on the federal income tax. And whatever the federal government does has almost a direct affect on the states, unless they decouple, which is hard to do.
O'BRIEN: Unlike the federal government, every state but Vermont is required by law to have a balanced budget. But they're loathe to raise taxes, leaving one obvious alternative.
IRIS LAY, CTR. BUDGET & POLICY PRIORITIES: Since September 11, states have been watching very closely what's going on. And in 11 states, governors by executive order have begun to cut spending.
(END VIDEOTAPE)
O'BRIEN: Initial cuts usually are in capital expenditures for new roads or new schools, complemented by hiring freezes and across- the-board spending cuts. In other words, Lou, as the federal government takes steps to encourage business and consumers to spend more, the states required to balance their budgets may end up doing quite the opposite.
DOBBS: The challenges get more and more interesting. Tim, thank you very much. Tim O'Brien.
The stimulus package may not be enough to steer us clear of recession. And a great deal, of course, depends on the consumer. In the words of New York Fed President William McDonough, "Today we need to go out and spend."
Kathleen Hays is here. She has a look at why some consumers, perhaps, are still a little cautious.
KATHLEEN HAYS, CNN CORRESPONDENT: And this fits in with Tim O'Brien report, Lou, because one of the things that's happening is people are getting laid off. When they get laid off, they don't pay the same payroll taxes. We're saying this in the weekly claims for unemployment benefits, new claims for the jobless benefits.
They fell unexpectedly by 67,000 to 468,000. But the problem is, that's still a high level. It still suggests a weak labor market. And look at this, the four week moving average rising. This is the kind of signal economists watch closely. And they're saying now this spells more trouble in the October employment report.
(BEGIN VIDEO CLIP)
BRIAN JONES, SALOMON SMITH BARNEY: I think the labor market is deteriorating at an alarming rate. I think right now with the numbers that we have in hand, you've got to expect the non-farm jobs for October are probably going to be off at least 300,000, and that we're also going to get a sharp rise in the jobless rate.
(END VIDEO CLIP)
HAYS: And it's layoffs and rising jobless rates that makes us cautious, makes us hold back on spending. We saw that today in the monthly numbers on same-store sales for the nation's big chain stores.
Actually, Wal-mart did quite well. They beat what they expected, up 6 percent. But bear in mind, a year ago when the economy was doing better, these were double digit gains from Wal-mart practically every month.
Look at some of the department stores. Federated down nearly 13 percent. The Gap losing 17 percent.
Now the retail analysts were saying part of the problem is that retailers just don't have the right stuff on the shelf. To me, that's something they have to correct. But you know, Lou, just a few minutes ago, something I want to share with you, I spoke to Art Spinella at C&W Marketing out in Oregon. They track auto sales, one of the nation's foremost sales trackers for the auto industry.
Well, the first 10 days of October, what they're picking up is that domestic sales could be 18 to 22 percent.
DOBBS: Wow.
HAYS: Now Art just told me -- he said that's probably mostly because of big fleet purchases that were put off in September after the attacks. However, it's also these zero incentives. And their field reps are hearing that the people going into the dealerships at GM, about 26 percent of them are saying, "Yes, it's because of the zero incentives." So those are having an impact.
They're not sure if these will hold up, but it's certainly a strong start for the month of October for autos.
DOBBS: That's surprising and amazing news.
HAYS: Yes. DOBBS: All right. Kathleen, thank you.
Well, still ahead on MONEYLINE, we'll have an update for you on the latest developments in America's war against terrorism, the world's war against terrorism. Former Defense Secretary William Cohen joins us next. We'll also report to you on security measures that oil companies are taking.
And investors on Wall Street today cheering today's strikes against the Taliban and al Qaeda in Afghanistan. We have some good news for you out of corporate American for a change. All of that and more still ahead.
(COMMERCIAL BREAK)
DOBBS: We'll be bringing you the very latest developments in the war against terrorism in just a moment. But first, we want to tell you about another powerful rally today on Wall Street. Stock prices surging, a second straight session of gains on the big board today. 69 stocks at 52-week highs. 24 stocks fell into new lows.
On the Nasdaq, 53 stocks at new highs and fewer than half that at new lows. The Dow surging another 169 points on the session. The index now fewer than 200 points away from the September 10 levels.
On the big board, advancing issues beat out decliners by a margin of about 2 to 1. Technology stocks also building on yesterday's strong gains. The Nasdaq soaring 75 points, gaining more than 4 percent. Market breadth very much positive. Advancers swamping decliners by a margin of more than 2 to 1.
Investors of Wall Street encouraged by good news on corporate earnings. The Dow enjoying back-to-back triple digit gains, in fact. Christine Romans at the New York Exchange. Greg Clarkin, as always, at the Nasdaq market site.
And Greg, because the Nasdaq had the greater gain, we're -- you know what? I've just been given word that we're going to be going to Boca Raton, where a -- the third case of exposure to anthrax that we've been telling you about -- we're going to go to Boca Raton if we can, for the latest there.
The third person exposed to anthrax in Florida we are now told is a 35-year-old woman. This 35-year-old woman exposed to anthrax, the third case, as we've said. And of course, one man dying as a result of anthrax. The woman is Stephanie Dailey, 35-years-old, as I said. And these, we are told, are breaking developments in her case.
And we are awaiting some word from there. We were told that those developments were taken place right now, but obviously, they are not. They are getting to prepared to come before our cameras. And while we're waiting for them to get ready, we're going to go back, as I said to begin with, to Christine Romans at the New York Exchange.
CHRISTINE ROMANS, CNN CORRESPONDENT: Hi there, Lou. It was a really powerful rally here for a second day in a row. And in fact, if you look at the broader markets, the Standard & Poors 500 has actually erased all of the losses from those terror attacks on U.S. soil. Now back to early September levels. And those patriotic buyers in the first few markets when the markets reopened are starting to looking even more smart.
Take a look at the big board winners. 3M, the best Dow gainer. GE, a good earnings report from this company. And it's keeping its targets ahead. As well, GE's NBC is going to buy the Spanish language network Telemundo for about $2 billion. Newscorp up on some positive comments in the company about ad -- the ad market. And Goldman Sachs and the brokers also doing well again today, despite a negative note from Prudential.
Meanwhile, the techs leading this rally. If you look at some of these. EMC, the most active, up 9 percent. IBM bouncing 2 percent. Texas Instruments and the chip really, Lou, these were on fire, up about 10 percent for the Philadelphia Semiconductor Index. And Corning up as well.
Now overall, people keep talking about this need to retest, Lou, retest those lows hit back in September, but as one newsletter writer said, he said, "Wouldn't that be just like this market to not do what everyone expects?"
DOBBS: And -- amongst a lot of others, I'm sure we'd be pleased to find this discussion of retest and everything to have been moot. Thank you very much, Christine from the -- Christine Romans from the New York Exchange, where the Dow just disappeared within 200 points away from its September 10 levels. The S&P 500 regaining those levels today.
Over on the Nasdaq, that index gaining more than 4 percent on the day, up more than 8 percent over the past two sessions. And tonight, the Nasdaq is finally above those September 10 levels.
Greg Clarkin to tell us all about it. Greg?
GREG CLARKIN, CNN CORRESPONDENT: And Lou, you know, the figure of 1695 has a lot of significance for the Nasdaq. That was the September 10 close, a day before the attacks. At about 1:15 today, the Nasdaq crossing over 1695 for the first time since then. Tack on a few points to finish at 1701.
Traders telling us there's a combination of factors they believe behind this rally. One is the increasing and growing confidence among investors. Two, and the fact that fundamentals are bottoming in a number of these industries. Morgan Stanley said as much on the chip business today.
Three, we've had no earnings shocks. Basically, we've had reassuring earnings guidance for the fourth quarter so far. Though it is early in the earnings reporting season. All that is equal to this Nasdaq at 1700.
Take a look at some of the big names on the day. You're going to see some impressive gains there. Dell Computer and Sun, up about 7.5 percent. Cisco, up about 8.5 percent. And then also, Intel tacking on $1.45. So Lou, I got an impressive powerful rally here on big volume, 2.5 billion shares. Lou?
DOBBS: OK, Greg, thank you very much. Greg Clarkin.
Now as we promised, the latest developments in the war against terrorism. The FBI today warning of possible terrorist attacks within this country or against U.S. interests overseas in the next several days. Other U.S. officials saying it's likely any such attacks would be linked to the al Qaeda network.
These pictures of the night sky over Afghanistan, U.S. forces unleashing punishing air strikes against both Kabul, Jalalabad and other Afghani cities. Those targets, of course, Taliban and al Qaeda network.
A camera picked up large explosions as well, east of Kabul, but as you can see, they're very little anti-aircraft fire. The Pentagon released the first video taken its jet aircraft fighters showing Taliban air defense sites being hit and obviously exploding.
The Immigration and Naturalization Service saying 9 of the 19 hijackers in the September 11 attacks were in the United States legally on the day of those attacks.
President Bush today honored the victims of the attack on the Pentagon in a memorial ceremony, where he pledged to bring those responsible to justice. The President also met with members of his cabinet at the White House. Vice President Dick Cheney, who had not been seen since Sunday, also attending while that meeting was underway.
The President will be holding a news conference this evening, 8:00 Eastern time. CNN, of course, will be carrying it live.
Oil prices today climbing higher. Speculation growing that OPEC could soon curb production in an effort to boost prices, also lifting prices. Saudi Arabia, the world's largest exporter, cutting its oil sales to Europe. Again, light sweet crude oil up 81 cents today to $23.34 a barrel.
As the world continues to strike at the Taliban and al Qaeda networks, there is growing concern about the safety of U.S. facilities in particular. From the Trans Alaska pipeline to the local refinery, just how vulnerable are those facilities to attack?
Kitty Pilgrim has our report.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Oil companies are often in the thick of political unrest. Employees at risk. Indonesia, torn by riots and extremism. ExxonMobil, BP, and ChevronTexaco all have operations there.
Exxon has shut its national gas facilities sporadically because of threats to employees. Shell and Amerada Hess are in Pakistan. In Saudi Arabia this past weekend, an employee of Halliburton, a Dallas oil company, was killed in a random blast.
Major oil companies tell CNN they have stepped up security, everything to requiring visible ID at all times, to evacuation plans. Most oil companies have been dealing with threats for decades. An innovative technology has insulated companies from worse case scenarios. Take pipelines. Most are below ground and easily contained if attacked.
EDWARD MORSE, HESS ENERGY TRADING COMPANY: Practically no month of the year goes by without a significant explosion somewhere on the pipeline system of Colombia. And the oil industry, the military, working together to patch things up relatively quickly. There are valves to turn things off.
PILGRIM: Tankers are most vulnerable when they don't.
(END VIDEOTAPE)
DOBBS: We are going now. This the 35-year old woman, who is Stephanie Dailey, the victim of the third anthrax exposure in Florida. Let's listen in.
(JOINED IN PROGRESS)
STEPHANIE DAILEY, ANTHRAX VICTIM: My duties do entail the mailroom.
QUESTION: How old are you?
DAILEY: 36.
QUESTION: Did you have a statement or did you just want to say...
DAILEY: I just want to say I'm fine. I'm not in the hospital obviously. And I went to work today. And I'm taking the medication like everybody else. And I'm doing good.
QUESTION: What was your reaction -- how did you find out the test results?
DAILEY: I was called aside and was told the information. And it was...
QUESTION: What did you say when they told you that?
DAILEY: I was shocked at first, but you know, I was like let's move on and do what I have to do to get better.
QUESTION: How did you respond? Tell me exactly again happened?
DAILEY: I was sitting in the room and they told me. And you know, the first moment is shock a little bit and stuff. And taking it all in. And then, you know. QUESTION: (OFF-MIKE)
DAILEY: No, I told my parents when I came home from work.
QUESTION: Do have any suspicions as to how you may have (OFF- MIKE)
DAILEY: It's an ongoing investigation. So I can't really go into it.
QUESTION: Can you (OFF-MIKE) the day that you find out, how it all (OFF-MIKE)
DAILEY: On the day that I found out, I had had? It was around 3:00. I met with -- so it was between 3:00 and 5:00 I found out yesterday.
QUESTION: And where did you take the test?
DAILEY: I took it on Monday.
QUESTION: What was it like going into work today? How were your colleagues?
DAILEY: They're fine. They're hanging in there.
QUESTION: (OFF-MIKE)
DAILEY: I know Ernie, yes, Ernesto.
QUESTION: Can you talk about they told you, what your reaction was? Talk about that. (OFF-MIKE) all that?
DAILEY: We just went in for the nasal swab. And that was basically it, filled out the paperwork and stuff.
QUESTION: OK, and when did you find out?
DAILEY: I found out yesterday. So that was on Monday. We went for the tests. And then yesterday was the...
QUESTION: Do you have any idea how you came in contact with it? Did they mention anything about the mailroom?
DAILEY: I really, no, I don't know.
QUESTION: Did they say anything?
DAILEY: It's an investigation, so I guess I can't say.
QUESTION: What did they say to you about that?
DAILEY: About?
QUESTION: About where you might have come into contact with it?
DAILEY: I don't know.
QUESTION: Were you at work when you found out?
DAILEY: Yes. Yes, I was called away from work.
QUESTION: Who called you?
DAILEY: The CDC and the health...
QUESTION: Did you finish your workday? You didn't come home right away or?
DAILEY: Well, at the end of the meeting was at 5:00, around 5:00 I got back to the office. So the day was almost over.
QUESTION: (OFF-MIKE)
DAILEY: You know, got to get back and get going I guess.
QUESTION: Tell us about the antibiotics. Are you feeling anything (OFF-MIKE)
DAILEY: Just makes you really thirsty and stuff like that.
QUESTION: (OFF-MIKE)
DAILEY: Unbelievable, I guess.
QUESTION: You don't seem very worried?
DAILEY: Yes, I'm, you know...
QUESTION: Could you talk about why you're not worried, because a lot of people are very concerned who don't work in the building and live nearby?
DAILEY: Well, I guess, you know, my faith in God. You know, I believe everything will be OK.
QUESTION: Do you feel that...
QUESTION: (OFF-MIKE)
DAILEY: When I first found out, you know, it was like the wind knocked out of you. I mean, you know, because you don't know exactly what all of it means until it's explained to you. And knowing that I can take the Cipro and through the 60 days and be, you know, be fine.
QUESTION: (OFF-MIKE)
DAILEY: I really don't know.
QUESTION: That's all. Thank you very much.
DOBBS: OK, Stephanie Dailey. We learned she is 36, not 35-years of age. She is obviously in very good mood and very positive demeanor. The third person exposed to anthrax. She found out yesterday. And the encouraging thing about that is that she said she took the test for the it, the nasal swab on Monday.
The -- she said she knew one of the other two who had been exposed to anthrax, Ernesto Blanco, a 73-year-old man who is recovering from pneumonia, but who had been exposed to anthrax, worked in the mailroom, worked with her at American Media.
Taking the medication, says that aside from some thirst, that she feels very well. So we will keep you up to date on that obviously that anthrax case in Florida.
Coming up next here on MONEYLINE, the latest developments in the air strikes against the Taliban and al Qaeda in Afghanistan. Former Defense Secretary MONEYLINE contributor William Cohen here next.
(COMMERCIAL BREAK)
DOBBS: More air strikes over Afghanistan. A military memorial in Washington and another in New York. Warnings of new terrorist attacks against the United States from the FBI.
Here with me now, former Defense Secretary William Cohen, regular MONEYLINE contributor.
Bill, you were at the Pentagon memorial today. Your thoughts?
WILLIAM COHEN, FMR. DEFENSE SECRETARY: Well, it was a very moving ceremony today with thousands of people who were in attendance. And the President demonstrated several things. Certainly compassion for the families of the victims who died both at the Trade Towers and the Pentagon and in Pennsylvania. But also great passion.
And what you saw was an absolute commitment no his part to carry this campaign against the terrorists to the farthest end. And it was a very poignant moment, I think, for all in attendance.
DOBBS: This goes really to the heart of something I wanted to raise with you tonight. And that is, as a friend of mine and a keen observer of political economics observed, there is the will of the state and the state of the will. This -- these air strikes, this response, this retaliation is now in its fifth day. Is it your sense that this administration has the will and the strength and the country has the will and the strength to carry this out to its full conclusion? That is, the eradication of terrorism around the world?
COHEN: This administration, this country, and we as individuals have no choice. We have to have the will, otherwise we will live in a world in which is contrary to everything that we believe in. And so, there is no choice, but to have the will.
We have the wallet, as President Bush 41 used to say. And we need the will. We have the will right now. And it is my belief that we will sustain that will that now is necessary. Because our lives, our civilization and way of life is yes, at stake. DOBBS: And tonight, we have word from the FBI, a warning from the FBI. No specific information, but a general warning that there -- that they have credible evidence that there could be a terrorist attack in the United States or against U.S. interests somewhere around the world over the next several days? What do you make of that?
COHEN: Well we've known that for some time. We've known that the -- those who planted the attacks on September 11 had been at work for years in the planning and the carrying on of the execution of that.
So this is not unanticipated. We knew they were going to strike with our without power, retaliation. And so, it's to be on alert, not to panic, but to be vigilant, to take security measures that perhaps it wouldn't take otherwise, but to continue doing what we're doing in our very lives, but be alert, be more aware of surroundings around you.
That's the best that we can do, knowing that the FBI and our intelligence agency are doing everything they can to track down those who are in our country or are operating abroad to carry out their heinous acts.
DOBBS: You were amongst the first in the Clinton administration to focus on bioterror and how to confront it. What is your best judgment here as to the level of the threat that bioterror represents now?
COHEN: Well, the -- it's very hard for the terrorists who actually manufacture biological weapons. And indeed, you know, chemical weapons to explode them. It can be done. And so, because the risk is so deadly in terms of the damage that could be done, the risk is rather low, but the damage would be high. So we have to take every measure that we can in protecting ourselves, our troops.
But also, we cannot play defense 100 percent of the time. We have to go after the terrorists, otherwise they're bound to get through at some point.
DOBBS: Bill Cohen, thank you.
MONEYLINE will continue in just one moment.
(COMMERCIAL BREAK)
DOBBS: And that is MONEYLINE for this evening. Thanks for being with us. I'm Lou Dobbs. Good night from New York.
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