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LOU DOBBS MONEYLINE
Dow Advances 33.15 to 9,587.52; Nasdaq Declines 9.76 to 1,827.77
Aired November 8, 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.
ANNOUNCER: This is MONEYLINE for Thursday, November 8. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening, everyone. President Bush rallies the home front. U.S. warplanes continue to target the Taliban. The president addresses the nation in two hours. And his message to America tonight: remain strong, remain patient. CNN will be carrying the president's speech live. And we'll have a brief preview for you in just a moment.
In Afghanistan, the United States continues to bomb terrorist targets. Opposition forces are now planning to launch a major offensive. We'll have a live report for you from the center of much of that activity: Kandahar, Afghanistan.
America's new war is hurting business at the Walt Disney company. Revenues, earnings and advertising dollars, all down. And prospects for a quick recovery are bleak.
We'll be joined by Disney's chief executive Michael Eisner. And on Wall Street, the Dow Jones Industrial Average, the S&P 500 end the day higher. The Nasdaq ends lower.
In the latest developments in the war against terrorism, Northern Alliance forces battling the Taliban say they are gaining ground in their advance toward the strategically rich town of Mazar-e Sharif. The Pentagon confirmed the presence of fighting in the area, as well as the importance of Mazar-e Sharif.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We're interested in it because it would provide a land bridge -- as has been said -- up to Uzbekistan, which would provide us among ever -- among other things a humanitarian pathway for us to move supplies out of Central Asia and down into Afghanistan.
(END VIDEO CLIP)
DOBBS: Meanwhile, three Japanese warships are headed towards the Indian Ocean. They will be providing non-combat support for the U.S. effort in Afghanistan. This is the first time that Japanese forces have operated outside Japanese territory since World War II. U.S. warplanes continuing their heavy bombing on the Taliban stronghold of Kandahar. CNN's Kamal Hyder is in Kandahar. Because of heavy bombing there right now, we cannot bring you live pictures of Kamal. Turning on that equipment, in fact, might attract enemy heat- seeking missiles. And Kamal is joining us by telephone -- Kamal.
KAMAL HYDER, CNN CORRESPONDENT: Lou, it's been a very Loud night. The residents of Kandahar woken up just a few hours ago, early morning here in Kandahar. Woken up by very loud explosions as a particular part of the city -- this is the northern part of the city, which was being targeted, with bombs falling on these parts of city.
There is an apprehension here that with the houses so old and, of course, houses which have withstood such heavy bombardment, that these houses might collapse. And it is causing a lot of panic as far as the women and children of Kandahar are concerned. They feel very insecure.
These attacks which started yesterday in the afternoon -- that being Thursday -- have continued throughout yesterday, on to the night and continuing morning Friday here in Kandahar -- Lou.
DOBBS: Kamal, can you give us a damage assessment from the previous evening's attacks yesterday? Again, Kandahar last night, your time, under heavy attack then as well. Any -- any battle damage assessment that you can provide us?
HYDER: Well, Lou, basically there is a place to the north called (UNINTELLIGIBLE) which is the co-commanders headquarter, very dangerously close to the main city. Obviously those routes being used in the afternoon and the evenings by pedestrians and ordinary people who happen to be passing by those areas.
Last evening's attack and this morning's attacks raising a lot of dust cloud over the city, covering most of the city in a huge cloud of dust.
And of course, the same area is being targeted consecutively. The (UNINTELLIGIBLE) has been hit since the beginning of campaign and many people in Kandahar feel that there is nothing left there, yet allied aircraft, they say, continue to bomb the same place again and again -- Lou.
DOBBS: Kamal, the Taliban -- any ability there to give us an assessment of the Taliban targets that have been hit as a result of these attacks?
HYDER: Well, Lou, the main targets that were hit earlier -- basically the airport facilities, the (UNINTELLIGIBLE) which is the military control area, the (UNINTELLIGIBLE) which is the co- commander's headquarters in the city and the western part of the city known as the (UNINTELLIGIBLE) area have been pounded again and again.
Most people here feel that the Taliban are not in town, that they have left and dispersed across Afghanistan into the rural hinterland. They -- they do not want to continue a conventional campaign and that the leadership here -- the supreme leader of the Taliban, Mullah Mohammad Omar, had said from the beginning that this campaign would not be a conventional fight against the Americans. Saying that Afghanistan was preparing for a guerrilla campaign.
This compounds the difficulties of allied bombers to try and find their targets across Afghanistan, and of course raising a lot of apprehension amongst the civilian population here that as cities are targeted, they become more and more vulnerable. These being the ordinary people of Afghanistan, caught in the middle of war for the last 23 years. Lou?
DOBBS: Are you saying there are no Taliban in Kandahar?
HYDER: Well, that is -- it would not be a correct assessment to say there are no Taliban in town. The Taliban are in town. They continue to maintain the law and order here and of course patrol the streets every now and then.
But there is no major concentration of Taliban forces. They know that they are the targets and they are not concentrating in any given area at any given time. They are roaming around in twos and threes and maximum five people together.
So basically it is very, very difficult to be hitting targets when you don't have concentration of people. And it must be remembered that whatever vital targets -- including tanks, armor or artillery -- were probably targeted in the first wave of the campaign -- Lou.
DOBBS: Kamal, thank you very much. Kamal Hyder. Again, the reason for that report by phone from Kandahar tonight, the airstrikes continue against Taliban and al Qaeda targets there . Intense bombing continues. And we need to point out as well that Kamal Hyder is in Taliban-controlled Kandahar and is within the jurisdiction of the Taliban. And that is important to remember within the context of these reports.
President Bush is in Atlanta tonight. He is at, in fact, the Centers for Disease Control. Scientists there, of course, have been investigating and researching the anthrax attacks. And in less than two hours, the president will address the nation from Atlanta.
Senior White House correspondent John King is traveling with the president and joins us now -- John.
JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Lou, in very limited excerpts already released by the White House of the president's speech tonight, Mr. Bush himself raises the question many Americans are asking and that the president hopes to answer in tonight's speech to the nation. Quote, "How should we live in light of what has happened?"
The president in that speech say all Americans have a new responsibility to be more vigilant, to be on alert for possible terrorism, to accept the hassle, if you will, of additional security, whether that be at airports or at harbors, nuclear power plants, other major transportation and commercial centers.
But the president will also try to reassure the American people, we are told, that the federal government is doing and will do all it can to improve the security of the nation and improve its tracking of terrorists, whether they already be in the United States or whether they are operating overseas.
The speech comes of course two months after the deadly attacks of September 11. It comes at a time the government has taken many steps, including creating a new cabinet-level agency to coordinate the war on domestic terrorism.
But it also comes -- as we have been reporting in recent weeks -- among -- amid a number of questions. Still no leads in the anthrax mailings investigation. Still major security breaches at several major airports of late, despite the heightened security.
So one challenge facing the president tonight to try to convince the American people that they should go about their everyday lives and that the government is protecting them.
But we are told, Lou, what the vice president called the "new normalcy" in a speech two weeks ago, the president tonight will call a new responsibility, saying this country should go on, that its values have been reinvigorated by these attacks but that life will never be the same in the United States, and that one part of that is that all Americans must be foot soldiers in the war on terrorism by looking out for it here at home. Lou?
DOBBS: John, in the -- in this speech -- we of course at CNN will be carrying the president's speech live. A number of other networks will not. Any White House reaction to that?
KING: Disappointment that all the networks did not carry the speech. The White House had considered making this an Oval Office address, a formal address to the American people.
Because there are no major new initiatives in the speech tonight -- some prodding of Congress to do some things the president wants, but no new major initiatives -- the White House decided not to formally request network air time, but it did encourage all the broadcast networks as well as cable outlets to carry this speech.
ABC will. We at CNN will. Some others will. The White House voicing some disappointment. The national security adviser joking earlier today she hoped the American people had the good judgment to watch those outlets that will carry the speech.
DOBBS: John, thank you very much. John King with the president in Atlanta tonight. John, thank you.
The terrorist attacks against the United States is seriously affecting profits at the Walt Disney company and nearly every other major company. Disney tonight reporting earnings of six cents a share, a penny less than what Wall Street had been expecting. Disney warning tonight that its current quarter results will also fail to meet Wall Street expectations.
The theme park business in particular continuing to be hurt by declining travel. Attendance at Walt Disney world in Florida likely to be down as much as 25 percent. Disney's ABC Television Network, as all other networks, continuing to suffer from falling advertising revenue.
Disney's Chairman and CEO, Michael Eisner, joins us tonight from Burbank, California. Mike, good to have you with us.
MICHAEL EISNER, CHAIRMAN & CEO, WALT DISNEY CORPORATION: Thank you, Lou.
DOBBS: These numbers, I know, as the company's leader have to severely disappoint you. If there is anything in this that is a bright spot, it's that you're in some very good company.
EISNER: Well, I think disappoint is the wrong word. I mean, the -- what's disappointing is what happened on September 11.
Our problems are not a problem of quality of product. Our parks are in fabulous shape. The Americans are -- as I've been listening to your broadcast -- are clearly nervous about flying, nervous about leaving their home, going to crowded places. That's getting less and less, by the way, as exemplified for instance by our movie "Monsters Inc." Just exploding in the box office this weekend. Twice what anybody...
DOBBS: Sure.
EISNER: And that really is the definition of yes, it has to do with a good movie and a well-marketed movie. But it also has to do with I think Americans are ready to get out.
Now, we don't know there's not going to be a -- more problems and more false warnings and more fear, but, you know, we have -- we are very comfortable with the level of our movies and our -- and our shows and our -- and our parks.
And it's just as in the past, with a military action outside of the United States, with the Gulf oil crisis and things like that: when we rebound we rebound well because there is usually a flight to quality.
So I am disappointed -- as everybody is -- in a -- what was a weakening economy and what clearly was a horrific September. But, you know, I know it sounds ridiculous, but I think we're holding up particularly well considering what's going on.
DOBBS: And as you pointed out, your movie "Monsters Inc." opening to better than $60 million. It was the biggest opening -- is that correct? --for an animated feature, ever. Is that -- that's correct, isn't it, Michael?
EISNER: I think it's the biggest opening for any film in November. I mean, this is a -- it was a very weird weekend. Usually it's a big school weekend and all that stuff. It's just the country was ready to be entertained. And -- and that's hopefully what we will be doing for the next period of time.
DOBBS: Have you seen -- we've seen enough tech -- as we reported here last night, Kitty Pilgrim reported a 41 percent gain in attendance, which was extraordinary. But are you seeing any uptick at all in your theme parks here?
EISNER: Well, our theme parks. For instance, California is up, because only 25 percent of the people arrive by air.
DOBBS: Right.
EISNER: Florida is not up. Although if you were in one of our parks you would think it was pretty crowded. Our cruise ships are full. Paris is doing great. Tokyo is going through the roof.
But the -- the only problem, at least for us -- and I think we're doing much better than our competition in this area -- is this fear of traveling. And that will go away. So one bad quarter that is our share of what's going on in the problem probably is not such a bad thing.
DOBBS: And the advertising slump which of course is affecting all networks -- also specifically your network, ABC -- when do you expect to -- if you have that visibility -- expect to see a reversal in the decline?
EISNER: Well, one cannot blame September 11 completely on the advertising problem. That was weakening before September 11. September 11 obviously exacerbated it.
I don't think the economy will be bad as long as some. I think there are -- there are -- a lot of people think it will recover, you know, next -- not next quarter but the quarter after that or even the one beyond that. So it will come back.
But yes, the -- the weakening advertising, the lack of commitment of advertisers to commit long-term -- even though the short term is a little up from what was called the upfront in the spring -- hurts, and, you know, our cable companies that aren't -- like the Disney channel, which doesn't depend on advertising, and ESPN, which has a subscriber growth and obviously outside the United States is OK.
But ABC and the other networks are suffering from such a boom last year. You know, we're -- we're on a comparison to a year ago. And a year ago was the highest of the highest of the highest. So now we're -- now we're suffering from other things.
DOBBS: Well, Michael Eisner, thank you very much. And we again congratulate you on the opening of "Monsters," and we hope your forecast is accurate for the entire economy. Michael Eisner, thanks for being with us.
EISNER: Thank you. DOBBS: Well, the United States postal service is -- as we all know -- going through very difficult times. It has lost three of its employees to anthrax. It has been running a deficit for the past year. That deficit has now risen by billions of dollars.
The postmaster general is now expected early next week to ask the federal government for aid the help the postal system recover at last those losses. Jonathan Karl joins us now with a report from Washington -- Jonathan.
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Lou, the postmaster general was here on Capitol Hill before a Senate appropriations committee saying that the anthrax attack and the aftermath of the September 11 attacks will cost the post office about five billion dollars or more.
Breaks down like this. He said just dealing with the anthrax attack and taking steps to prevent again future attacks will cost three billion dollars. And because of declining mail volume because of the attacks, another two billion dollars in lost revenues.
The postmaster general came before that Senate appropriations subcommittee and said that he is counting on Congress to come to rescue.
(BEGIN VIDEO CLIP)
JOHN POTTER, POSTMASTER GENERAL: We are working on the premise that the leaders of the nation want to ensure that all the nation's mail system is protected from this kind of terrorist threat in the future. We are proceeding with our plans and actions on this basis. While we need some funding soon to make this happen, just as important is the commitment to meet this challenge with full funding.
(END VIDEO CLIP)
KARL: But even before the September 11 attacks, the post office was projecting a $1.35 billion loss for this year alone. With that in mind, the Speaker of the House recently on CNN said that he's open to the idea of helping the post office deal with the anthrax situation, but there won't be a lot of sympathy in Congress for the idea of a wholesale bail out.
(BEGIN VIDEO CLIP)
REP. DENNIS HASTERT (R-IL), SPEAKER OF THE HOUSE: I'm not sure that everybody wants to bail out the post office. They have some needs. They need a new screening machines and those types of things for safety. But I don't think we have to go back prior to September 11 and bail them out for things that, you know, are bad management.
(END VIDEO CLIP)
KARL: As you mentioned Lou, that final -- formal request is expected on Tuesday from the post office to the Congress. And with the postmaster general talking about five billion dollar impact here as a result of the attacks, it's expected that request for Congress will be billions of dollars -- Lou.
DOBBS: Jon, thanks very much. Jonathan Karl reporting from Capitol Hill.
Well, still ahead here, as we've been reporting to you, some charities have been slow to distribute money to families of the victims of September 11th. Tonight, we will have for you the story of one woman's battle to receive the relief that she and her family desperately needs.
Also tonight, a disturbing look at the nation's nuclear power plants and authorities concerned about their vulnerability to terrorist attacks. And despite the economy and the markets, my next guest says now just might be a very good time to invest. MONEYLINE continues in just one moment.
Announcer: Up next, Lou is joined by Michael Holland, chairman of Holland and company.
(COMMERCIAL BREAK)
DOBBS: The economy, of course, is still struggling. Congress still struggling to come up with a plan to revive the economy. Senate Democrats pushing their recovery package today, but it may not be a plan Republicans will accept. Tim O'Brien reports from Washington.
(BEGIN VIDEOTAPE)
TIM O'BRIEN, CNN CORRESPONDENT (voice-over): The debate had a familiar ring: one party accusing the other of ramming through an stimulus package not out of compromise but out of arithmetic, in this case because Democrats outnumber Republicans on the finance committee.
SEN. CHARLES GRASSLEY (R), IOWA: Let me say that the result has been worked out in advance. You need not stick around. the fix is in.
O'BRIEN: The appearance of pork in the Democrats' bill didn't help.
SEN. TRENT LOTT (R-MS), MINORITY LEADER: We're talking about spending money on apples and apricots, bell peppers, bison meat, blueberries, eggplants, lemons, pumpkins and watermelons.
O'BRIEN: The Democrats' plan, drafted by committee chairman Max Baucus, will likely be approved.
SEN. MAX BAUCUS (D-MT), CHAIRMAN, FINANCE COMMITTEE It provides some basic help to people who have lost their jobs and risk losing their health insurance. It's balanced, it's compassionate, it's what business leaders and economists tell us they want. It will work, it hits the mark.
O'BRIEN: But just when the country supposedly needed bipartisanship, senior Republican senators said they'd never seen it so ugly. SEN. ORRIN HATCH (R), UTAH: I just can't understand how we have so miserably failed to find some middle ground here.
SEN. PHIL GRAMM (R), TEXAS: The product we are producing today is rank partisanship in the clearest form that I have ever seen it since I have served here.
O'BRIEN: There was some posturing, to be sure.
SEN. JOHN BREAUX (D), LOUISIANA: I would kind of say that we're entering into the "kabuki phase" of writing legislation, where we both sort of dance around each other.
O'BRIEN: And there are important areas of agreement: sending rebate checks to those who didn't earn enough to qualify the first time around. Extending unemployment benefits for at least another 13 weeks. Accelerating depreciation for business. And expanding medical insurance for those who have lost their jobs.
(END VIDEOTAPE)
O'BRIEN: But of course there are still major differences, and on those very little compromise. So the stage is set for what could be a ferocious fight on the Senate floor, but Republicans say they will use procedural rules to prevent this measure from ever even coming to a vote unless there are concessions -- Lou.
DOBBS: Well, the president wants this package ready for his signature before the Thanksgiving recess. How likely is it?
O'BRIEN: Well, it will -- a while back it seemed like that be would a slam-dunk. But that's certainly not the case now. Some people are suggesting it might not even happen before the end of month.
But Trent Lott and Tom Daschle are quite persuaded, quite confident that they will get something out by November 30th -- when the president really asked for it -- and that is the best bet right now.
DOBBS: Is it also a positive sign when we -- when we hear just outright hyperbole like there's more partisanship here than before? That sounds like it might be a contrary indicator.
O'BRIEN: Well, it could be. But there's no question that in the Senate today, as in the house last month, this has been a very partisan debate. But I think Senator Breaux also had it right when he described this as a kabuki dance. They are posturing, they are getting their act together and getting ready for negotiations down the road.
DOBBS: Just so they stay away from the (UNINTELLIGIBLE). All right. Tim O'Brien, thanks. Despite hopes for that economic stimulus package, several leading brokerage firms recently cut their earnings growth estimates for equities. It will be tough sledding for stocks in the fourth quarter and beyond, especially if -- as UBS Warburg says -- the quarter proves to be the deepest trough in the current recession. JP Morgan seeing few bright spots for investors apart from select energy and consumer staples issues, and continues to warn investors away from most technology stocks.
And despite those dour reports, market psychology improved today after the European Central Bank and the Bank of England cut their interest rates. Also lifting investor sentiment today, a better-than- expected report on weekly unemployment benefits claims. Michael Holland joins me now. And good to have you here.
MICHAEL HOLLAND, CEO, HOLLAND & CO.: Good to be here, Lou. Thank you.
DOBBS: Sentiment today rose, obviously, at the -- in the early stages. It is -- it seemed because of those interest rate cuts in Europe. But dissipated by the end of the session. What was going on today, in your judgment?
HOLLAND: I don't want to get too far inside baseball here. But the technical stuff that went on, as you pointed out, in the morning we had the European Bank's surprisingly large decrease in interest rates: one half of one percent. The markets over there went up a lot. There was spillage into the U.S. market here .
We actually had at the peak this morning of the U.S. markets, the Nasdaq was up 30 percent from its September lows.
DOBBS: And do you think that's where it should be?
HOLLAND: I think what it reflects is, it should be where people say it should be. And I think what people are saying in the markets -- as we have talked about over the last several weeks -- people are using the stock market and the bond market and the dollar -- the foreign exchange market -- people around the world, as an opinion poll.
They are saying the economy here stinks, as Michael Eisner was just telling you, therefore earnings stink right now. What is happening is they are discounting the future. They are saying America isn't particularly strong.
Can you imagine what happened in September? And here we are today. There has been an incredible vote of confidence in the United States leadership, the United States position and how the war is being prosecuted. This is a war vote as well.
DOBBS: And the war to this point -- while very little in the way of both detailed information day-to-day, obviously there have been no reversals and may it always be so. The market itself, as you say, gaining back to pre-September levels.
HOLLAND: Right.
DOBBS: What should an investor do here? Is it appropriate time, given that, to move into the market?
HOLLAND: As all the old veterans have said over the last several weeks, nothing panicky should be done. One of things investors have to realize, both retail -- individual investor as well as institutional investors -- is interest rates are down very low and they are probably going to go lower.
The Federal Reserve has interest rates at two percent. They may be going to 1.5 percent. Money market funds are yielding two percent. So there are stocks -- a lot of them -- that are yielding more than bonds.
So people have to realize that not only is real estate attractive, as they have been investing in their own homes, but they are probably stocks even in this difficult economy that -- look, you have stocks like Merck which actually yield -- (UNINTELLIGIBLE) which yields more than money market funds right now. J.P. Morgan yields 75 percent more than one. So you have very good companies that are yielding a lot.
So investors should be mindful of the changes that are going on quite rapid.
DOBBS: Recovery at hand?
HOLLAND: Recovery is -- is elusive. But we always will have it. Because -- one is three months early, six months early, a year early, it doesn't really matter. You have to be there when it happens because it gets discounted really fast, Lou.
DOBBS: OK. Michael Holland. Good to have you here.
HOLLAND: Good to be here.
DOBBS: Coming up next, the United States continues the assault on the Taliban stronghold of Kandahar. We'll have the latest developments for you coming right up. We will also chronicle the story for you of a woman, widowed by the September 11th terrorist attacks, and her struggle to obtain charitable relief she and her family desperately need.
And are this country's nuclear power plants vulnerable to terrorist attacks? We'll have a report for you next. Also tonight, a columnist who says Argentina needs to take a page from FDR's economic philosophy if it hopes to save its economy. That all coming up next. Stay with us.
ANNOUNCER: Coming up, Lou speaks with economist Paul Krugman.
(COMMERCIAL BREAK)
DOBBS: In the latest developments in the war against terrorism, President Bush visiting the Centers for Disease Control in Atlanta today. The president says he wants to thank the hundreds of employees who have been working to save American lives. As we reported, the president will address the nation at 8:00 p.m Eastern time. Northern Alliance forces say they are now just a few miles from the strategically important town of Mazar-e-Sharif. Meanwhile, U.S. warplanes are carrying out relentless attacks against targets around the Taliban stronghold of Kandahar. CNN's Kamal Hyder says planes bombed the same targets over and over again.
Two defectors from Iraqi intelligence say they worked at a secret Iraqi training camp that trained Islamic terrorists, and that that training had been conducted since 1995. "The New York Times," in its reports, quotes the defectors as saying they did not know if those militants were linked to Osama bin Laden.
Americans are now concerned about the security of national nuclear power plants. The vulnerability of one such plant near New York City, Indian Point Power Plant, prompted a group of politicians and public interest groups to ask for its temporary shutdown.
Steve Young has the report.
(BEGIN VIDEOTAPE)
STEVE YOUNG, CNN CORRESPONDENT (voice-over): Indian Point lies just 40 miles from New York City. One of the planes driven by terrorists into the World Trade Center September 11 flew overhead. Public interest groups and politicians today asked the Nuclear Regulatory Commission to shut down the two operational Indian Point reactors until the potential terrorist vulnerability and the plant's safety system are fully assessed.
No nuclear plant in the world is so close to a major city.
ROBERT KENNEDY III, RIVERKEEPERS: Within the 50 mile radius, what is called the kill zone or the jeopardy zone of Indian Point Power Plant, there are 20 million people. These are the areas that would be affected -- most affected by fallout if the plant was to go into meltdown.
YOUNG: If a suicide airline pilot managed to smack into one of the reactor buildings or containments, and nuclear materials were widely disbursed by the prevailing wind, which is usually due south, that could cause a catastrophe. Or could it?
RALPH BEEDLE, NUCLEAR ENERGY INSTITUTE: I'm telling you that from my experience of almost 40 years in operating nuclear power plants in this country, that the design requirements or other considerations give me a great deal of confidence that that aircraft would not penetrate the containment.
REP. EDWARD MARKEY (D), HOUSE ENERGY COMMITTEE: While it may give him a great deal of confidence, but the chairman of the Nuclear Regulatory Commission has made it quite clear that he and the Nuclear Regulatory Commission have never studied whether or not 757s or 767s can, in fact, penetrate a nuclear power plant.
YOUNG: Indeed, in a letter to Congress from Markey, the NRC said it had never studied the impact of any large airliner crash into a nuclear reactor. But this 1982 report for the NRC conducted by the Argon National Laboratory found an accidental crash could probably trigger a cascade of dangerous events. And without even penetrating the containment, a reactor meltdown was one conceivable scenario.
(END VIDEOTAPE)
Terrorists could have studied the 1982 report discussing general plant vulnerabilities at more than 70 NRC meeting rooms around the nation. It wasn't pulled until about a month after the World Trade Center attack -- Lou.
DOBBS: What is the likelihood of a shutdown?
YOUNG: They're probably going to fast track this. Normally the NRC could take months with it. Because they're asking for an immediate shutdown, it has to be given a priority look.
DOBBS: OK, Steve, thank you. Steve Young.
Well, former President Clinton took an extraordinarily long view, and perhaps controversial one, of terrorism. In a speech to students at his alma mater in Georgetown University yesterday, Mr. Clinton said the United States looked the other way as innocent citizens and Native Americans were killed.
(BEGIN VIDEO CLIP)
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: This country once looked the other way when significant numbers of Native Americans were dispossessed and killed to get their land or their mineral rights. Or because they were thought of as than less than fully human, and we are still paying the price today.
(END VIDEO CLIP)
DOBBS: Mr. Clinton was invited to speak by the University School of Foreign Service. He used the occasion to talk about terrorism and its roots, saying it dates back to the First Crusade when Jews and Muslims were slaughtered by Christians.
Argentina is suffering from its fourth year of recession and is on the verge of one of the biggest defaults in history. "New York Times" columnist, MONEYLINE contributor Paul Krugman says Argentina should ignore the International Monetary Fund, and instead follow his advice. Professor Krugman joins us now from Princeton.
Good have to you with us.
PAUL KRUGMAN, "NEW YORK TIMES" COLUMNIST: Good to be on.
DOBBS: The Argentines facing a very difficult situation tonight, after repeated assurances by their government that they would not default, that the situation was at hand. Nearly everyone now is prepared for default. What do you think will happen?
KRUGMAN: I'm afraid they will default, but that's going to be a tragedy because they are -- it's not really a debt problem. This is a situation some of us have been watching for a while. And it's become increasingly bizarre.
What we've got is a country that doesn't have a big debt burden by the standards of most other countries in the world. Doesn't have a big budget deficit. Has a depressed economy. And what they're doing, more or less, on -- you know, on the advice of a lot of people, including -- I don't think the IMF is particularly to blame here.
But what they seem to be doing is they seem to be -- you know, they're afraid to do the normal things, which is to devalue their currency. They're afraid of shooting themselves in the foot. And so, they're shooting themselves in the head instead. Extraordinary and disastrous events are now unfolding.
DOBBS: What is the likelihood that there is a risk of contagion for the other countries of South America and Central America in particular?
KRUGMAN: I think actually it's not very large. And the reason is that Argentina has put itself in a unique straitjacket. Argentina has -- it's the last of the Latin American countries to cling rigidly to a one-for-one peg between its currency and the dollar. It's the last to say we cannot take our destiny into our own hands.
And so, you know, Brazil, which has a history that is just as bad as Argentina's for economic policy, had a devaluation, followed independent monetary policies, got itself out of its crisis two years ago. Argentina now really stands alone. And I think the markets understand that now. They understand that Argentina is not Brazil. It's not Mexico.
DOBBS: Very quickly, what's the likelihood there's time for them to follow your advice, Paul?
KRUGMAN: They have -- the answer is I think they're going to do this. I think in the end they're going to drop the currency peg, but they're going to go through a lot of unnecessary hell first.
DOBBS: OK. Paul as always, good to have you here.
KRUGMAN: Good to be on.
DOBBS: Fewer Americans filing for unemployment assistance last week. That's very good news, but job cuts are still rising. Employers are cutting jobs to save money and to boost sagging stock prices. But some job cuts don't turn out to be quite as severe as originally reported.
Kitty Pilgrim now takes a look at the layoff as a tactic.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Layoffs are now visible. Here in New York City, 10,000 people line up for a job fair in October. Nationwide, the number of layoffs has been a daily drumbeat of defeat for the individual worker. 400,000 job cuts last month. But to corporations, the layoff is also an announcement that costs are being controlled. Many economists admit companies will lump job cuts together to appear very aggressive.
WILLIAM DUDLEY, GOLDMAN SACHS: I think that companies recognize that expense control is rewarded in the stock market. And so, they want to show that they are controlling expenses. But I think the reason why the labor shedding has been so intense since September 11th is that a lot of business that were on the fence, should I cut payrolls or should I not cut payrolls, they all moved to one side of the fence.
PILGRIM: The stock market often rewards aggressive cuts. In recent days when Deutsche Bank announced cutting 7,000 workers, the stock shot up that day. The same for British insurer Prudential PLC.
Some gains stick. Proctor & Gamble announced cuts of 9,600 in March. The stock is up 14 percent. Cisco, 8,500 in April. Stock up 26 percent. Sears, nearly 5,000 job cuts in October. Stock up 24 percent since then. Sun Micro, 4,000 cuts in October. Stock up about 55 percent.
But economists say just cutting jobs without an attempt to restructure often doesn't fool the markets.
RICHARD BERNER, MORGAN STANLEY: When investors believe that a company in laying people off is really restructuring the business, then you can see the price go up. But sometimes you investors perceive that layoffs are taken out of a position of weakness. And unless they are accompanied by a fundamental plan to really reorder things, then the message may be muddled.
(END VIDEOTAPE)
PILGRIM: Now some economists admit that sometimes companies in the same industry indulge in competitive cuts, all slashing jobs to prove they're as competitive as the other. That only works up to a point. When a large number of companies cut jobs all at once, it can slow the economy and make things much worse for everyone -- Lou.
DOBBS: As we have recently experienced. Kitty, thank you. Kitty Pilgrim.
Just ahead, more of our investigation into the charities of September 11. Tonight, we'll have the story for you of this woman's fight to get the help that you have so generously provided those charities. Interest rates are falling, so why aren't you getting a better deal on your credit card? We'll have the reasons why and some timely advice just ahead. Kathleen Hays will be here with that story. And a decline in global interest rates giving investors reason now to invest in stocks. We'll take a look at the day's activity on Wall Street next.
(COMMERCIAL BREAK)
DOBBS: Our reporting to you on the September 11 charities, and the controversy that now envelopes many of them, has generated a tremendous response from our viewers. E-mails, many of you expressing anger, frustration, that the money you gave isn't has not gotten through to the families you wanted to receive that help.
One that was particularly troubling to us came from a woman in Connecticut. She wrote us to say, "Having lost my husband in the World Trade Center, I have the same questions as Mr. Dobbs, where are all the donations?"
We thought you'd want to hear her story. Peter Viles with her story.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): Hours after the attacks, when the commuter trains pulled into Norwalk, Connecticut on that terrible night in September, there were nine missing from Norwalk, nine who never made it home. One was Ron Gilligan, husband, father of three, Little League coach.
LIZ GILLIGAN. WIFE OF TERRORISM VICTIM: The telephone rang and I answered the phone. And it was my 17-year-old daughter. She was hysterical. I really couldn't understand what she was saying. She just kept screaming, "My dad, my dad!" And I said, "Ashley, what's the problem, what's the matter?" And she said, "Turn the TV on." So I dropped the phone, and ran in, and I turned the TV on. And there's a plane sticking out of my husband's building.
VILES: So ended a romantic adventure that began 18 years ago, when Ron and Liz Gilligan came to America from England. And so began a hellish and humbling journey for this mother of three.
GILLIGAN: I am a very proud person. I don't relish having to apply for charity and all of those things. I've never had to do it in my life. And so it was very hard.
VILES: Harder than she could have known, because all that generosity, those benefit concerts, the outpouring to the Red Cross, has only resulted in a confusing maze of red tape, bewildering to a young widow.
GILLIGAN: It's very frustrating. It's -- I feel angry because the information to access all these charities is not filtering down clearly to the families. The United Way, if you contact them, they pass you again to the Red Cross. It's kind of like you get passed around.
VILES (on camera): Geography is also a challenge to many of these families, which are spread across the New York suburbs. The best resource available to them is Pier 94 in Manhattan, where so many of the charities have set up shop. But for Liz Gilligan and other widows here in Norwalk, that's a 90 mile roundtrip.
(voice-over): She has received some aid and she's grateful for it. Three months of living expenses from the Red Cross, just under $2,000 from two other charities, $5,000 from her husband's employer, Cantor Fitzgerald, where he was a systems administrator. But she is tired and confused. How can she best provide for her family if she doesn't understand how those dozens of charities work?
GILLIGAN: Who's monitoring the funds? Who's making sure that it does go directly to the families?
VILES: The Gilligans live modestly in Norwalk. 17-year-old Ashley wants to start college next fall. She knows that might not be possible. (UNINTELLIGIBLE) is 10 years old. And Darren, the youngest, who taught his father the rules of baseball is eight.
GILLIGAN: My husband and I wanted to raise our children, not necessarily to be nuclear physicists, but just to be decent human beings. And what keeps me going is that it's now my sole role to do that. And I'm not going to let him down.
(END VIDEOTAPE)
VILES: What is difficult for these families is that they are still mourning. Many still in emotional state shock from having witnessed the murder of their loved ones on television. And they are just not ready for struggling over charity money -- Lou.
DOBBS: We talked with Dr. Bernadine Healy here. We have talked with the head of September 11 Fund. That's a story that I think they need to hear, don't you?
VILES: Yes, I think they need to pay more attention to the victims, less attention to process and what they're doing to fix it. If the story is the victims and the help they just can't get.
DOBBS: It's remarkable. And I think we have to credit here New York's attorney general, Eliot Spitzer, for focusing on their problems, trying to bring some sense to this. But I have to say, the lack of responsiveness on the part of these charities to what is a clearly documented need for them to change the way they're doing business, their intractability, is remarkable in the face of congressional hearings.
VILES: They are not responding as quickly as the American people did and as some others have done in this time.
DOBBS: Yes, it's remarkable. These charities working very hard to do good things for good people who desperately need their help. It's time for people to -- the management of those charities to quickly awaken.
Pete, thank you. Great job of reporting.
Let's turn to interest rates. Mortgage interest rates tonight sitting at their lowest level in 30 years. Many consumers now feel credit card rates thought remain stubbornly high. It is a feeling that can be justified.
Kathleen Hays joins us now with a closer look at exactly what's going on -- Kathleen. KATHLEEN HAYS, CNN CORRESPONDENT: And of course, people are watching MONEYLINE. They're watching the news. They know the Fed cut interest rates 10 times this year, that interest rates are down 4.5 percentage points at the short end of the market anyway. So people are saying, "How come my credit card rate doesn't fall?"
Look at the prime lending rate. It's gone from 9.5 percent at the beginning of the year. It's down to 5 percent. This is kind of a small business lending rate in many instances. But look at our credit card rate. From about just 16 percent, it's now only gone down to just over 14 percent.
Now granted, that's a 25-year low. The lowest rate in the 25 year history of the credit card industry. And in fact, it will save about $11 billion in interest money this year, about $140 on average per family.
But why aren't we saving more? Well first of all, about 25 percent of cards set a minimum rate. Once that minimum is triggered, they can't go lower. Almost half have fixed rates. Three years ago, it was less than 20 percent.
MBNA, one of the big companies, fixes 90 percent of its rates. Of the ones that adjust, 30 percent adjust quarterly instead of monthly. So they're rather sticky.
But you don't have to be a victim. There are some things you can do. And one of the obvious ones is shop around. Go on the Internet. Bankrate.com showed us some great rates. Don't be late. That'll tack a lot of money onto your interest rates right there. Just put the stamp there, pay on time, and read the fine print.
Here's line from a big bank's credit card statement. Where they say if you default in any way on your credit card agreement, they can boost your interest rate to 24.99 percent. One of our staffers, one of our colleagues had a 9 percent rate. It shot up to 21 percent. He paid late only once, but he didn't notice it for a couple of months.
Now fairness to the credit card companies, I talked to the financial services roundtable. They did point out all the things they've done since September 11 to ease people's credit card payments if they're affected by the attacks. Bank of America has pardoned all the credit card debt for people who died in the attacks. So they are being responsive in some ways, Lou.
DOBBS: In some ways. And in terms of these rates, again, our viewers are absolutely upset about the level of these rates. Many talking about the fact as consumers, they're carrying much of the burden right now. Let's give them that e-mail, rather that URL that they can get some help in terms of the best rates available. Because a competitive market is what works for everybody, right?.
HAYS: Absolutely. And that's what they say, shop around. Www.bankrate.com is one of many. It's a very user friendly site. Look at it.
DOBBS: Bankrate.com.
HAYS: You got it.
DOBBS: Thanks, Kathleen.
Just ahead, Enron tries to restore a shattered image by trying to come clean. We'll take a look at what went wrong at Enron and why the power company could now be sold at a fire sale price. And we'll have a live update for you next on Wall Street.
(COMMERCIAL BREAK)
DOBBS: Well, Enron restating its earnings for the past four years now less than a month after disclosing that the SEC was looking into what it calls its off balance sheet transactions. Those transactions leading to a $1.2 billion write-down of shareholder equity. The stock price has collapsed.
Fred Katayama has been taking a look at the situation. Fred, the very latest for us?
FRED KATAYAMA, CNN CORRESPONDENT: Well, you know, that stock collapsed yet again today. That's because basically a lot of investors are hoping for an announcement of a deal with Dynegy, a merger announcement. Instead, they basically got a bombshell of announcement. Enron saying that it is restating its earnings lower, to the tune of nearly $600 million since 1997. As a result, it's also recalculating debt. Debt rising by $2.5 billion -- Lou.
DOBBS: And Dynegy, the price here. Most of the analysis I've seen is about $10 a share. The stock today fell again. It closed at $8.41 a share. That represents, should that deal happen at that level, a significant premium. What do you think will happen there?
KATAYAMA: Well, a lot of the analysts I spoke to think that Dynegy, if they're able to get it, will get at a fire sale price because Enron really doesn't have much negotiating power at this point.
DOBBS: And price is one thing. The value is another.
KATAYAMA: That's right and restated earnings. We'll have to recalculate.
DOBBS: Fred, thanks a lot. Appreciate it. Fred Katayama.
A solid rally on Wall Street today, nearly evaporated by the close. Stocks rose, as we said, after the Bank of England and the European Central Bank cut their interest rates by a half percentage point. The Dow is up as much as 167 points earlier in the session, but it finished just 33 points higher.
The Nasdaq had been up as well strongly, but it lost that lead, down 9 points at the close. The S&P 500 managed to eek out a gain of 2.74. Coming up next, we'll have your comments. And we'll take a look at your comments on the Fed's rate cut, the Red Cross, and we'll take a look at what to expect tomorrow.
(COMMERCIAL BREAK)
DOBBS: Taking a look at tomorrow, the Producer Price Index. Economists expect a drop in wholesale prices overall and in the core rate as well.
Taking a look now at some of your thoughts. One subject that many of you are aggravated about, credit card interest rates.
Brett writing into say that "our credit card interest rate has not fluctuated at all. We're still paying exactly the same percent we were when the year began." We hope our report tonight on credit card rates helped ease some of your frustration, and give you a better understanding of the subject. If not, we'll have Kathleen Hays back tomorrow.
Still on rates, Charles Webb from California writes: "If our economy continued to founder after nine cuts, what makes the Federal Reserve think a tenth reduction will have any effect?" And I said Charles, it's Chase Web.
Roy says the Fed shouldn't be increasing money supply at all, but stimulating demand instead. He writes to say, "If the Fed had not cut the rate so frequently, consumer confidence and hence the economy would've improved.
Onto the Red Cross. After our interview with outgoing president Bernadine Healy, Srinny in Maryland writes in to say that "I consider it a personal affront that she refuses to distribute the monies. I will never contribute another dime to such charities as long as people like Ms. Healy are at the helm."
Roger Svenson in California writing into say: "Dr. Healy made a fool of herself. The Red Cross will no longer be on my list of favorite charities."
Some of you think that I've been too harsh on the American Red Cross, but lawmakers in Washington are taking notice. In a congressional hearing today on Capitol Hill, New York's attorney general Eliot Spitzer told the panel that the American Red Cross should hand over every dollar raised, or else they'll be in legal hot water. Spitzer came just short of threatening a lawsuit.
Spitzer said the charity could be open to charges of false advertising or violation of consumer protection laws.
As always, we want to hear from you. E-mail us at moneyline@cnn.com. That's MONEYLINE for tonight. We thank you for being with us. I'm Lou Dobbs. Good night from New York. "WOLF BLITZER REPORTS" begins right now.
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