|
 |
LOU DOBBS MONEYLINE
Progress in Middle East; Federal Agents Arrest Head of Islamic Charity
Aired April 30, 2002 - 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 Lou Dobbs MONEYLINE for Tuesday, April 30th. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening. Progress and a setback in the Middle East, the deadlock at the Church of the Nativity begins to break, but the United Nations may disband the fact-finding team originally planned to be sent to Jenin. Tonight, two very different views on how to end this conflict, Israeli Cabinet Minister Effi Eitam and Palestinian columnist Daoud Kuttab will be here to tell us their views.
Federal agents arrest the head of an Islamic charity today. He is accused of funneling money to Osama bin Laden. We'll have the latest on efforts to stop the flow of money to terrorists.
Charges of price fixing at the gasoline pumps, oil executives today grilled by Congress over the cost of gasoline, tonight we will separate fact from fiction and tell you why Congress is wasting its time and your money on this particular matter.
A big day in the markets. A triple-digit gain for the Dow on the last trading day of the month. Market watcher Joe Battipaglia and Donald Straszheim will be here to tell us why now may be, may be a good time to be bullish.
And spectacular new pictures from the edge of space, tonight we'll show you the incredible images just released, taken by the new camera on the Hubble Space Telescope.
But first, 27 Palestinians today walked out of the Church of the Nativity. That is the largest number to leave since the standoff began a month ago. Mike Hanna says he witnessed a group of Palestinians leave that compound and board a bus. Israel says they are not wanted for any crimes and they will be released. Mike Hanna has the report from Bethlehem.
(BEGIN VIDEOTAPE)
MIKE HANNA, CNN JERUSALEM BUREAU CHIEF: Days of negotiation finally showing some benefit emerging from the Church of the Nativity, more than 20 Palestinians, among them some Palestinian police officers, some Palestinian youths and Palestinian civilians. Their identities were checked by Israeli soldiers. They were boarded on a bus and taken away to an undisclosed venue for further questioning. Where, says Israel, once it has been determined that they are not on one of its wanted lists, they will be allowed to return home.
There are still an estimated 120 people inside the Church of the Nativity, among them a group of men that Israel says are wanted terrorists, and negotiations about the fate of this group, as well as the others within the church will continue in the days ahead. Mike Hanna, CNN, Bethlehem.
(END VIDEOTAPE)
DOBBS: Tonight, negotiations to end Yasser Arafat's five month confinement to Ramallah appear to be ending. British and American security experts met today with Palestinian officials and they are trying to finalize details on the handover of six Palestinian militants. Once they are transferred to British and U.S. custody, Arafat is expected to be allowed to go free. Matthew Chance joins me by telephone now from Ramallah. Matthew.
MATTHEW CHANCE, CNN CORRESPONDENT: That's right, Lou, and those meetings that you mentioned between Palestinian officials and security experts from Britain and the United States are continuing even though it's one o'clock in the morning here local time in Ramallah.
Much of the day has been spent in the West Bank town of Jericho, where those experts have been expecting a prison where six Palestinian wanted by Israel and currently holed up inside Yasser Arafat's compound here in Ramallah, are to be interned under international supervision according to the U.S. plan that was announced by President Bush some days ago once the agreement (UNINTELLIGIBLE) and Israel is satisfied there's not going to be any revolving door situation emerge here, whereby these six Palestinians are simply allowed to walk free once their troops leave the outskirts of Yasser Arafat's compound.
Then the agreement is on the table and the door is open, of course for those troops to leave and for Yasser Arafat to come out for the first time since the end of March when his compound was placed under siege. Lou.
DOBBS: Matthew, thank you very much, Matthew Chance reporting from Ramallah. Meanwhile, that standoff between the United Nations and Israel has apparently reached the breaking point. Today, U.N. officials said that Secretary General Kofi Annan will likely disband the fact-finding team that after Israel's security cabinet voted against cooperation with a U.N. fact-finding team.
It was supposed to investigate alleged humanitarian atrocities during Israel's invasion of Jenin. Israel claims the United Nations' proposed team would not have been objective in its investigation.
In nearby Hebron, Israeli tanks and armored vehicles today began pulling out. The Israel Defense Force says it arrested 250 Palestinians, amongst them 40 people who were wanted. Nine Palestinians were killed in the latest invasion by Israel. Israel says it entered the West Bank town to crush the terror infrastructure there. The hunt for al Qaeda terrorists now appears to be concentrating near the Afghan-Pakistani border. Today, Australian forces backed by U.S. troops killed as many as four al Qaeda rebels and they uncovered major weapons caches. Pentagon Correspondent Jamie McIntyre joins me now with the story. Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, this was all part of that Operation Mountain Lion, the search for remaining pockets of al Qaeda and Taliban, that search now concentrating in the southernmost part of Afghanistan, right near the border with Pakistan.
This incident began last night. Australian troops encountered a small group of what was believed to be al Qaeda fugitives. They exchanged fire, believing that they killed two of the enemy forces, but the bodies were taken away by the suspected al Qaeda terrorists. Then, they dug in for the night. There was another attack on the Australian forces. Again they exchanged gunfire. They believe they killed two more at that point.
The U.S. Army 101st Airborne Division came in with a couple of companies, about 100 or so troops to back up the Australian as a quick reaction force. They had been searching that area again.
They went through caves. They found more weapons, more evidence of places where al Qaeda has been, including what one Pentagon official called "some fresh trails," indicating they've been in the area. The operation continues. There's been no further engagement with any Taliban or al Qaeda in the last several hours or so. Lou.
DOBBS: Jamie, thank you very much, Jamie McIntyre reporting from the Pentagon. Federal agents today arrested the director of a U.S. based Muslim charity. The FBI charges the man with funneling money to Osama bin Laden, and trying to obtain nuclear weapons for the al Qaeda terrorist network. Allan Dodds Frank reports.
(BEGIN VIDEOTAPE)
ALLAN DODDS FRANK, CNN CORRESPONDENT (voice over): the Benevolence International Foundation and its executive director are being charged with perjury for allegedly lying about providing financial and logistical support to Osama bin Laden's terrorist network.
JOHN ASHCROFT, ATTORNEY GENERAL: The complaint which was filed today alleges that al Qaeda has an established practice of using charities for terrorist purposes and that executive director, a Mr. Arnaout has ties to bin Laden, including being trusted with the care of one of bin Laden's wives in Pakistan in 1989.
FRANK: The government laid out a series of alleged connections between Benevolence and known al Qaeda operatives. The government says one of them, Mamdouh Salim tried to obtain chemical and nuclear weapons for al Qaeda. He has pleaded guilty to Attempted Murder of a corrections officer, while in custody in New York.
Today's court documents say that Benevolence aided Salim in his 1998 travels.
PATRICK FITZGERALD, U.S. ATTORNEY: When he traveled to Bosnia, he traveled on a visa arranged by Benevolence International Foundation and his hotel was paid for by Benevolence International Foundation, and in documents signed in the name of Enaam Arnaout, it was indicated that Salim was a director of Benevolence International Foundation.
FRANK: Among the other al Qaeda operatives alleged aided by Benevolence, Wali Khan Aman Shah (ph), a key participant in al Qaeda plots to bomb 12 airliners and to assassinate the Pope.
(END VIDEOTAPE)
FRANK (on camera): The complaint also charges that the Benevolence Foundation in 19 wire transfers send more than $650,000 from Citibank in Illinois to alleged Chechan rebels overseas. Lou.
DOBBS: Allan, thank you very much. Pakistan's military ruler, General Pervez Musharraf is poised tonight to win a five-year extension as President of Pakistan. Today voters overwhelmingly casting ballots in favor of a referendum that would extend Musharraf's term. Final results of the referendum are expected tomorrow.
Musharraf seized power in a bloodless military coup in 1999. The first Parliamentary election since the coup were scheduled to have taken place in October. The referendum renders that possibility moot.
A rally in the markets to tell you about, the last trading day of the month in fact, the Dow closed up 126 points, after briefly crossing 10,000. The NASDAQ rallied more than 31 points. The S&P 500 gained almost 11 and a half points. We'll have, of course, a full wrap up for you of all the day's activity on Wall Street. We will also take a look at how stocks fared for this month of April.
The issue of executive pay a hot topic for IBM shareholders today. They protested a widely used formula in corporate America, that formula of using income from pension funds to boost executive compensation. Steve Young has our report.
(BEGIN VIDEOTAPE)
STEVE YOUNG, CNN CORRESPONDENT (voice over): IBM's annual shareholder meeting in Louisville, Kentucky Tuesday was a magnet for the Communications Workers of America. They were trying to pull the plug on big blue's practice of counting pension fund income, along with IBM's operating profits in calculating compensation for top executives.
LINDA GUYER, COMMUNICATIONS WORKERS OF AMERICA: Last year, the CEO of IBM took home over $200 million worth of stock options, in spite of the fact that the business was slowing down, in spite of the fact that there were thousands of layoffs. So what we want is not greed. What we want is something that's fair to everybody all around.
YOUNG: In urging a no vote on the resolution, IBM said the company's executive compensation programs and policies are properly designed to motivate the company's executives and to align their interests with the interests of shareholders.
The controversy about using pension fund income to make executive performance look better is rippling across a variety of other big companies. They include Verizon, AT&T, GE, Kmart and Qwest.
KAREN FRIEDMAN, PENSION RIGHTS CENTER: By using this vapor profit to increase corporation profits, it gives companies a disincentive to give workers benefit increases and retirees needed cost of living adjustments from the pension fund.
YOUNG: A June, 2001 Credit Suisse First Boston study found 30 percent of Fortune 500 companies reported pension fund income, adding an average 12 percent to pretax profits.
(END VIDEOTAPE)
YOUNG (on camera): The IBM resolution won today only 17 percent of the vote, but a similar measure at Verizon earlier this month won 43 percent, up from 19 percent a year ago. Clearly resentment is rising. Lou.
DOBBS: And adding to the focus on pension fund accounting as an issue in corporation earnings results.
YOUNG: This is really ironic. It's an '87 (UNINTELLIGIBLE) rule that was supposed to have your account prove losses, and now it's turned into this.
DOBBS: A way in which to enhance executive compensation, imagine that. Steve, thank you very much. Coming up, we'll tell you about the fall of WorldCom Chief Bernie Ebbers beaten down by a plummeting stock price, a mountain of debt, and yes a very large personal loan from the company.
Investors today jump in to the market. We'll be talking with strategist Joseph Battipaglia about whether there will be better times ahead in the month of May. And the amazing pictures from the Hubble Space Telescope, the first images released since that new enhanced camera was put aboard the orbiting conservatory. We'll tell you how the extremities of deep space are within, if not our grasp, at least our vision.
(COMMERCIAL BREAK)
DOBBS: A dramatic departure in the world of telecom. One of the most successful dealmakers and entrepreneurs of the 1990s, Bernie Ebbers, forced out of the company that he built, WorldCom, amid a crisis of confidence. Peter Viles reports.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice over): He was the relentless dealmaker. He charmed investors. He built WorldCom into a long distance giant, but in the end Bernie Ebbers was pushed out by his board, another victim of the telecom implosion. JEFF KAGAN, TELECOM INDUSTRY ANALYST: He knew exactly what the company needed through the '80s and '90s. It was a Horatio Alger great American success story, but the environment changed.
VILES: Ebbers was undone by a crisis of confidence, WorldCom stock down 88 percent in the past year, some of its bonds trading at 40 cents on the dollar, an SEC investigation into $366 million in company loans to Ebbers, all while the long distance business is in a free fall. His replacement Vice Chairman John Sidgmore immediately tried to squelch talk of a bankruptcy.
JOHN SIDGMORE, CEO, WORLDCOM: I'm not a bankruptcy expert, so I would not be doing this to take the company through Chapter 11. This is not a financial turnaround, you know, so to speak.
VILES: As battered as it is, the company does not appear in immediate danger of running out of money. Total debt is $28 billion, but only $60 million matures this year, plus $2.2 billion in debt service. But WorldCom has $1.6 billion in cash, will generate $7-$8 billion in cash flow this year, and has untapped lines of credit to borrow another $8 billion. So Ebbers leaves a business in trouble, but it is a real business. It did report a first quarter profit.
ALAN MINTZ, BEAR STEARNS: I don't believe a bankruptcy is liable to happen in the short term, meaning over the next nine-ish month because I don't see a catalyst to create a bankruptcy.
(END VIDEOTAPE)
VILES (on camera): The ultimate solution in this industry is probably a round of consolidation, but today the Baby Bell, one of the prospective buyers, SBC, took itself out of that game for now, its chairman saying: "I am not buying any long distance company. I am not buying anything." Lou.
DOBBS: A real business but a business that has, as I saw in your numbers, about nine months of liquidity.
VILES: Sure. The next nine months are fine. Then you start getting maturities of $2 billion a year for the next three years. That's what investors are worried about. That's why the longer maturing bonds are trading as junk, even though they don't have -- they have investment grade ratings right now.
DOBBS: Peter, thank you very much, Peter Viles. Hewlett Packard is a step closer to finalizing the Compaq deal. Earlier today, a Delaware court cleared the company of acting improperly in that planned merger. Shareholder Walter Hewlett sued, of course, charging the company with coercing Deutsche Bank, a large shareholder into supporting that merger. Hewlett also accused the company of withholding financial information.
The judge's decision in favor of Carly Fiorina and Hewlett Packard does raise some issues about Deutsche Bank's conduct. Judge Williams Chandler did say he found it troubling that Hewlett Packard and Deutsche Bank held a conference call on the day of that shareholder vote. The judge says the call raises questions about the bank's internal ethics.
General Motors finalized a deal today to buy parts of South Korea's Daewoo Motors, but not everyone certainly was happy with that announcement and agreement. These are union activists who staged an angry protest at the signing ceremony, where at least it was to have taken place.
Union members, as you can see there, were just a little more than upset, concerned about possible layoffs. The agreement caps more than a year of negotiations. It also gives General Motors a key production base in the fast-growing Asian market.
Coming up next here investors showing some signs of optimism at least for the day, the Dow Jones Industrials posting a triple-digit gain after April, we hate to tell you the worst month since last September. Confusion and misinformation about the price of gasoline, we'll tell you whether Congress and consumers are right to be worried about gasoline prices. That's our next story, stay with us.
(COMMERCIAL BREAK)
DOBBS: This live picture of the Empire State Building, the rainbow behind it. We show you pictures like these when Mother Nature decides to celebrate a rally on Wall Street, a rare one indeed, wrapping up what was a dismal month on Wall Street, a solid rally today.
Stocks powered higher after a better than expected report on consumer confidence. The Dow closed up 126 points, the NASDAQ gained nearly 31 points on the day, the S&P 500 rose more than 11 points, following six straight losses.
Despite today's rally, a brutal month for the markets, the month of April. The Dow fell more than four percent, the NASDAQ tumbled 8.5 percent, the S&P 500 down six percent. Christine Romans, here now with a look at some of the biggest movers in the activity on Wall Street, Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: And we had a nice rally today, but it couldn't wipe away that performance for the month. The telecom stocks very weak this month. Look at WorldCom, those shares falling 63 percent in April. Its CEO Bernie Ebbers has now resigned.
TYCO closed higher today, but tumbled 44 percent this month, battered by downgrades, a huge loss in its quarter, and a decision not to split into four pieces.
Dynegy reported a steep first quarter loss today, secured $900 million in a line of credit, but the shares are down 40 percent in April.
IBM and GE also victims of April's sell off. IBM fell 19 percent and GE 15 percent. Lousy earnings the reason, S&P 500 earnings are down 11.5 percent in the first quarter, read by dismal technology and energy results. Tech earnings are down 30 percent compared with last year, communications, transportation, utility earnings all sharply lower.
Where is there growth? Health care, financial, consumer staple and consumer cyclical companies all posting year-over-year earnings gains. It's no coincidence that strength on Wall Street lately has been in those sectors. Defense sects were big winners in April, and today Northrop Grumman rallied $4.50 after it won a $2.9 billion Navy contract to build a new class of attack ships. A big loser today, Eli Lily, warned about earnings for 2002, and 2003, and that stock losing three percent today. Lou.
DOBBS: Eli Lily right after a number of people started boosting the stock, talking about how great it was, and the company comes out within a week of all of that and warns.
ROMANS: Yes. Spring showers may be bringing May flowers, I don't know, but April was tough, Lou.
DOBBS: I liked that. I like that, thanks. For more on today's rally, I'm joined by someone who is, I think we can safely say one of Wall Street's biggest bulls, Joseph Battipaglia joins us. Joe, good to have you.
JOSEPH BATTIPAGLIA, GRUNTAL & COMPANY: Good to be with you, Lou.
DOBBS: April was a disaster.
BATTIPAGLIA: Yes.
DOBBS: The worst month since September. It's tough to be a bull in this market right now, isn't it?
BATTIPAGLIA: It is, because we're in a process now moving away from the bubble market that we had a few years ago. We've had two years of losses. This is starting out to be the third year of that process. We need a lot of things to be corrected here, and unfortunately the accounting questions, the financing questions, the growth by acquisition strategies, telecom technology generally have all still been question marks for investors, and this process has been weighing on them for a long time. So it's not surprising that we run up and run back down again.
DOBBS: And executive compensation, regulatory oversight is continuing through congressional investigations. An investor to be confident in this environment, has to be a to-the-bone optimist, does he or she not?
BATTIPAGLIA: Oh, absolutely, and we also have to look at the fundamental conditions for the future and that's where the promise lies, because indeed the U.S. economy has begun a process of recovery. The Federal Reserve is going to be very accommodating on the question of interest rates. Inflation, with the question of oil put aside for the moment, is very stable, and I think oil will be contributory to a positive outlook on inflation, and ultimately the valuations of stocks relative to the earnings power will come to a level that makes it attractive once again to be that buyer of stocks.
DOBBS: When?
BATTIPAGLIA: That conviction is still not there.
DOBBS: When? When?
BATTIPAGLIA: I don't think it's going to be that far into the future, quite frankly, only because we're now starting to think about the year 2003, and I do believe, just as we've had consumers staying better than expected, and inventories are grown again better than expected, business investment is going to surprise a lot of investors in the second half of this year and the first half of next year to add to the positive thrust in the marketplace.
DOBBS: Well that's good, well and good as they say, because in this most recent report, business investment declining again. Five consecutive quarters of earnings declines. What's going to drive this market higher?
BATTIPAGLIA: I think it's overall demand for goods and services that has started to pick up in the fourth quarter, accelerate in the first quarter. It will become a global phenomena and out of that will come renewed business investment.
DOBBS: You're saying final demand accelerated in the first quarter?
BATTIPAGLIA: No, final demand was a little soft, but it had expanded. I think you're going to see a pattern of expansion throughout the rest of this year into the following year, not only in the U.S. but in Europe and other places that will make the requisite investment in capital a must, and even technology companies will benefit from that.
As companies realize that obsolescence is a real factor for them, and if they want to remain competitive and keep the productivity high, which keeps their margins where they are, you need to make the investments.
DOBBS: Productivity certainly a terrific story in this first quarter, a GDB report assuming it is not revised away as occasionally does happen. What companies are you buying here?
BATTIPAGLIA: We are buying companies that are tied to the economy itself, whether it be service related companies in health care. We think financial services are due for a rebound. There's been undue pressure there. Capital goods companies makes a lot of sense here. Indeed, global companies with a brand franchise make all the difference, and Intel would be in that category.
DOBBS: Joe, thank you very much.
BATTIPAGLIA: My pleasure.
DOBBS: Joe Battipaglia, thanks. Well there is a vacancy to tell you about tonight in the ABC executive office suites. Stephen Bornstein today resigned as president of the ABC network. Bornstein's departure comes amid a ratings slump at ABC, a decline mirrored by that of its once popular show "Who Wants to be a Millionaire." Bornstein was appointed ABC Television's president just last May. He is said to be leaving to pursue other interests.
Linda Lay is taking control of her family's fortune, as the household downsizing continues. Linda is, of course, the wife of former Enron CEO Kenneth Lay, and she is opening an antique and secondhand shop called Jus' Stuff. That stuff will include, we're told, the Lay's personal property, at least some of it, as well as items belonging to the family and acquaintances.
Since Enron declared bankruptcy last December, the Lay's have been selling off many assets that include some expensive homes in Colorado and Galveston, Texas. Jus' Stuff will open in Houston in May in a building owned by the Lay Real Estate Company.
Coming up after this break, a check of tonight's top stories; also, gasoline prices an endless source of griping and debate now on Capitol Hill. Many drivers think the big oil companies are out to fleece them. Now, you know, we're going to take a very unpopular position tonight and tell you the facts. That story coming right up, and we'll be telling you also about the amazing new pictures from the Hubble Space Telescope, and even better, we're not only tell you about them, we'll show them to you. And a leading astronomer and astrophysicist will be here to talk about those pictures and tell us what they mean for our universe. Stay with us.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS MONEYLINE continues. Here again, Lou Dobbs.
DOBBS: These are the top stories we're following tonight. Israel playing hardball on the United Nations mission to Jenin. That fact-finding mission tonight looks as though it will not happen. U.N. Secretary-General Kofi Annan considers disbanding his fact-finding team.
Cracking down on international terrorism, federal agents today arrest a man accused of lying about his links with Osama bin Laden and his al Qaeda terrorist associates.
Worldcom CEO Bernie Ebbers calls it quits. The man who built one of the world's largest telecom companies succumbs to a plunging stock price and a mountain of debt.
And a rally in the markets gives investors, at least for the day, reason to be cheerful. But April was still the worst month since last September on Wall Street.
Two major obstacles continue to block progress in the Middle East. Yasser Arafat remains at his compound in Ramallah, despite the agreement to allow him freedom of movement. And Israel continues to object to the United Nations fact-finding team mission that was to be sent to Jenin to investigate alleged atrocities.
Kitty Pilgrim talked to one of the hard-liners in the Israeli cabinet about both issues -- Kitty.
KITTY PILGRIM, CNN CORRESPONDENT: Lou, former Brigadier General Effi Eitam has served in the Israeli military for about 30 years. He's one of the hard-line leaders of the religious right and I asked him did he support the agreement by the Israeli government to possibly allow Palestinian leader Yasser Arafat's freedom of movement?
(BEGIN VIDEOTAPE)
BRIGADIER GENERAL EFFI EITAM (RET), ISRAELI CABINET MINISTER: The decision to release Arafat from the (UNINTELLIGIBLE) was a very hard decision for most of the Israelis, to see this murderer, and a man who is in charge for all the killing and terror all around, going out free.
It's quite a hard decision. But we now expect the Palestinian Authority to prove and to show that by releasing Arafat, they will really take serious steps towards fighting terror.
PILGRIM: You've been a very strong critic of Yasser Arafat and also the Oslo peace process. How do you see the situation moving forward? What's your vision of progress?
EITAM: It's very well proved that in the last three weeks, when Israel started to defend its own citizens and to take responsibility over the security, terror have been so dramatically reduced. I remind you and the viewers that three weeks ago, more than 100 Israelis used to be killed at the end of every week.
So it's very clear that Israel, for quite a long time, will have to continue the operation in different ways, in different profiles. But Israel is now the only address for security and defense of its own citizens, its own people.
PILGRIM: We understand that the Israeli security cabinet voted yesterday to still take issue with the U.N. fact-finding commission on the Jenin refugee camp, and is still not allowing them into the area and will not let them proceed with their fact finding. What conditions must be met, in your mind, to allow this inquiry to proceed?
EITAM: The way that this team was structured, and the way it was -- it got its mission, and the persons who were chosen by Kofi Annan to be in this team, couldn't really make sure that there will be an objective fact-finding process. And that's why Israel and the cabinet rejected this team, but not the idea of having another team under some other conditions.
I hope that the U.N. will not go to a more extreme and tough decisions against Israel as a result of that negotiations which are very legitimate, with the U.N., about the structure and the goals of this team. I hope that in a short time, maybe hours or days, we should be able to find a kind of a compromise which will allow such a team to come, and to enjoy the full cooperation of Israel in its mission.
PILGRIM: All right. Thank you very much for joining us for this discussion, Effi Eitam.
EITAM: Thank you.
(END VIDEOTAPE)
PILGRIM: Mr. Eitam is a controversial figure because of his very hard-line positions. And he's recently said that it would be better to hand over the tapes of the Jenin action to the United Nations than to allow soldiers who participated in the operation to testify -- Lou.
DOBBS: Kitty, thank you very much.
Later here we'll hear the Palestinian view. I'll be talking with Palestinian columnist, Daoud Kuttab, coming right up.
Still ahead here, sorting out fact from fiction in what has become a heated debate on Capitol Hill over gasoline prices. Everybody's griping. Do they know what they're talking about? We'll have a report on whether drivers should be concerned about what some are calling outrageously high gasoline prices.
And the spectacular images from deep space. Astronomers celebrating the first results of the multibillion dollar upgrade of the Hubble space telescope.
And anyone, anyone who has driven a car shouldn't miss the fact- finding mission on gasoline prices. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Well, 5.8 percent growth in GDP for the first quarter and at least a one-day rally today on Wall Street. Is this recovery? Donald Straszheim is here, the president of Straszheim Global Advisers, to tell us -- is this really recovery?
DONALD STRASZHEIM, PRES., STRASZHEIM GLOBAL ADVISERS: Lou, I think it's a real recovery, but I think it's going to be kind of a slow and sluggish recovery. But there are plenty of positive signs that I think are convincing.
DOBBS: Like what?
STRASZHEIM: For example, industrial production has turned around, new orders have turned around. Employment is up for the last couple of months. Consumer confidence is not great, but it's materially better.
DOBBS: You know, you mentioned consumer confidence. Today a number of media writers talking about the market rallying today, because of a stronger than expected consumer confidence report. In point of fact, it was a weaker consumer confidence report. It was just better than expected. Are we going to play the expectations game, as well now, with economic reporting, like we have for so many years over corporate earnings?
STRASZHEIM: I think that's going to be the case for some time, like it has been. But this was consumer confidence data that wasn't as strong as had been expected. But it is clearly better than it was three or four months ago.
And that's the case in a recovery. We've got a lot of numbers, three or four months ago, they were all bad. Now they're mixed. And in three or six months, I think they'll all basically be good.
DOBBS: Let's talk about that GDP report. Five-point-eight percent is a blowout by any stretch of the imagination. I think we should give, also, Merrill Lynch some credit because they came out with a number that was very close to that.
But how long can that kind of growth continue? Because a lot of that was inventories. A lot of it was -- about half of it was consumer demand that may turn out to be revised considerably lower.
STRASZHEIM: It was a great deal, inventories that won't last. But the other parts of the economy, I think, will start to take over the load, in terms of growth. Housing has -- never went down. The problem with that is it's not going to go up. So it won't give you that kind of a lift.
DOBBS: Automobiles?
STRASZHEIM: The consumer sector and other consumer durables, like automobiles and so forth, have been still pretty strong. But I think they will remain relatively healthy, if not -- if not really hot.
DOBBS: No more, no one in the country wants you to be right more than I do. I'm an optimist by nature. But to play the devil's advocate here, we've got consumers who are straddled with just record debt levels. We have a remarkable level of installment delinquencies and bankruptcies, as well as defaults, now, on mortgages. Can the consumer stay the course here?
STRASZHEIM: I think the consumer can because I think you'll start to see employment do better over the next six or eight months. Most companies did an awful lot of cost-cutting. I think most of that cost-cutting is over. We're right at the bottom in terms of corporate earnings. They will begin to improve. And that will start to lift people's confidence.
DOBBS: Donald Straszheim, as always, good to have you here.
STRASZHEIM: Nice to be back, Lou.
DOBBS: The price of gasoline often provides fuel for political posturing in Washington, particularly in an election year. Today, certainly no exception. A congressional committee held a hearing with some of the usual suspects and some very bad information. Tim O'Brien has the good information.
(BEGIN VIDEOTAPE)
TIM O'BRIEN, CNN CORRESPONDENT (voice-over): Why are gas prices so volatile? After a ten-month probe, investigators for the permanent Senate subcommittee on investigations blame mega mergers, like ExxonMobil and BP Amoco, which they say have stifled competition. The chairman of the committee says some companies have also intentionally withheld gasoline from the markets in order to inflate prices.
SEN. CARL LEVIN (D), MICHIGAN: The ability to control supply allows oil companies to spike prices in a concentrated market, without adequate competition to challenge them.
O'BRIEN: Among the companies singled out for criticism, Marathon Ashland Petroleum, whose president flatly rejected suggestions the company withheld gasoline from the market.
GARY HEMINGER, PRES., MARATHON ASHLAND: The answer is an emphatic no. The fact is that Marathon Ashland Petroleum produced 33 percent more reformulated gasoline than the year before, and we sold every drop.
O'BRIEN: Heminger and the other oil company execs testified recent spikes in gas prices are more attributable to uncertainty about the price of crude oil and industry efforts to comply with new clean air regulations.
The committee report does not accuse the oil companies of conspiring to keep prices high or any other illegal acts. In fact, a gallon of gas continues to be a reasonably good buy. When adjusted for inflation, gas prices today, around $1.45 a gallon, are near the lowest levels of the last 20 years -- dramatically lower than at the peak of the Iran oil crisis in 1980. The $1.22 a gallon back then translates into $2.51 in today's dollars. In 1990, a gallon of gas cost around $1.58 in today's dollars.
(END VIDEOTAPE)
Higher fuel efficiency standards for cars might help bring gas prices down even further. But the committee chairman, Carl Levin, has resist that. Proponents of those higher fuel standards say if Levin really wants to find out why gas prices are going up, one place he might want to consider looking is in the mirror -- Lou.
DOBBS: OK. And perhaps look at just a few of the facts: consumers getting a great deal on gasoline. All right, thanks for pointing that out, Tim. Tim O'Brien from Washington.
"CROSSFIRE" begins in just a few minutes. Let's go to Robert Novak and Paul Begala in Washington to tell us what's up for discussion tonight. Gentlemen.
ROBERT NOVAK, "CROSSFIRE": Lou, we'll talk to a former Israeli ambassador of Washington and find out what Israel has to hide about from this U.N. investigation, if anything. And then we'll also look at a new report on homeland security, a critical report, and ask are we any safer than we were eight months ago? PAUL BEGALA, "CROSSFIRE": And then we're going to ask, how would you like it? Of course you spend an hour on camera, one of the best hours on television, Lou. But how would you like it if cameras followed your every move?
Here in Washington all the way to L.A., police departments are setting up cameras in a big brother style surveillance. So we'll bring in a civil libertarian to debate that with the police chief of Washington, D.C.
And I just wondered, Lou, do they follow you everywhere in New York? Probably the paparazzi, right?
DOBBS: Only the paparazzi, I assure you, Paul. Just like you and Bob there in Washington. Gentlemen, we look forward to it. Thank you.
Earlier in this broadcast, we heard the views of an Israeli cabinet minister about resolving the Middle East conflict -- I can't even say it, let alone at this point, envision it. My guest now is a Palestinian columnist.
He is a Christian. He is a U.S. citizen. Daoud Kuttab is the director of the Institute of Modern Media at Al-Quds University in Jerusalem. He is a newspaper columnist who's covered this area for 20 years. Daoud, it's good to have you with us.
DAOUD KUTTAB, AL QUDS UNIVERSITY: Thank you, sir.
DOBBS: Much is being made of at least the suggestion that Yasser Arafat will be soon permitted freedom from Ramallah. Is that, in your judgment, a breakthrough? Is it significant?
KUTTAB: I think it's a breakthrough on two levels. On one level, there has been a lot made about trying to isolate him and change the democratically-elected process which brought him to power. The other thing is the way he's getting out, because the bringing of American and British wardens is a small step, I think, in bringing some kind of a solution to this conflict.
Because it's been insanity. Palestinians and Israelis have been killing each other. And we need help. We need help from outside.
DOBBS: Do I infer correctly from what you were talking about, in terms of the wardens, if you will, the marshals, the U.S. beginning this process with the British, that you're talking about positively the idea of a peacekeeping force? An international peacekeeping force?
KUTTAB: I think what we have seen -- and I've seen a lot -- that whenever there is foreigners in the friction area between Palestinians and Israelis, the violence goes down, the number of deaths and injuries goes down. Israelis, when they know there's journalists around, there's foreigners around, they tend to behave differently. Let's bring them in so that we can start stopping this hemorrhaging and building a process for peace. DOBBS: In the role of the Arab states, obviously the conflict between the Israelis and Palestinians foremost, appropriately. But the failure of the Arab states to provide economic support, humanitarian aid, and to improve the environment for Palestinians, is there any sign that that is going to change as part of this process?
KUTTAB: I think in the last few months we've seen a major interest in the Arab countries to put a lot more money into the Palestinian areas. But you have to realize that the economy cannot be always fed with money. There has to be freedom of movement, of goods and people.
DOBBS: I quite understand.
KUTTAB: There has to be an improvement in that situation. But I think the Arab countries have pledged increased numbers of money. And Palestinians just want to have freedom. And I think the economy will kick itself in and there will be much better situation if we're allowed freedom and independence.
DOBBS: Freedom, independence, certainly the sine quo non of peace. Also the security for Israel. And is it your judgment that that can be secured?
KUTTAB: I think Israeli security and Palestinian security are necessary. They are the pillars for any kind of a peace process. And that can be accomplished, but we have to go out to the root of the problem.
There is a foreign military occupation of our land. People's lives, children, everyday people, are really there suffering. Our institutes has been trashed by the Israel army. We run a TV station that does tolerance programs, democracy issues. We are facing a problem that has to end, which is occupation.
DOBBS: Daoud Kuttab, thanks for being with us. Come back soon.
KUTTAB: Thank you.
DOBBS: Coming up next, astronomer Michael Shara on those amazing pictures today from the Hubble space telescope. They are simply amazing. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The newly upgraded Hubble space telescope is sending back the most detailed pictures ever seen of deep space. Space shuttle astronauts recently replaced the main camera aboard Hubble, making it ten times more powerful.
Michael Shara, a professor of astronomy at Columbia University, is with us tonight. He's also an astrophysicist for the American Museum of Natural History in New York. And if you've not been to the Rose Planetarium, if I may say, it's certainly a great trip and a wonderful place. Mike, great of you to be here.
MICHAEL SHARA, AMERICAN MUSEUM OF NATL. HISTORY: Thanks, pleasure.
DOBBS: If you will, guide us through these pictures. We have some videotape of a couple of the images, and if we could roll that. And just to show you what is coming back from deep, deep space. And this is the red cone nebula?
SHARA: That's right. What we're seeing here is a stellar nursery. There are stars being born a-plenty, and just bursting out of their cocoons. The really, really bright objects in the center of the field are those newborn stars, and they're lighting up all the surrounding gas and dust, and starting to evaporate.
And the dark stuff that's trailing off down into the left on the screen is the star forming material. There's new generations of stars that are being born and formed there.
DOBBS: And how far out in space is this?
SHARA: This is a couple of thousand light years away. And we're seeing the...
DOBBS: That's relatively close.
SHARA: Yes, it's really in our own backyard. It's part of our Milky Way galaxy.
DOBBS: I love it, a couple thousand light years, it's relatively close. Let's take a look, if we may, at the next image, which I -- has been, by your former colleagues at Johns Hopkins, entitled "Mice." And these are either interacting or colliding galaxies, if you will?
SHARA: It's really both. The object on the left and on the right are the centers of two galaxies. And then you see that long streamer trailing away for hundreds of thousands of light years. And that's really material that's been tightly torn or stripped out of the galaxy that's on the right.
DOBBS: To put that in some context, we just talked about the red cone being several thousand light years.
SHARA: Right.
DOBBS: And you're talking about the trail from the mice collision reaching out...
SHARA: Hundreds of thousands...
DOBBS: It's remarkable.
SHARA: It is very large. We're talking about galactic scale. So this is really the scale of the island universes of our universe. These are things that are very large. Each one of those galaxies contains many, many thousands of those cone nebula.
DOBBS: Incredible. Absolutely incredible. Let's look at some of the other video from the Hubble that was just released today. And this is just incredible to me. This is, as we pull out, the tadpole, is it not?
SHARA: Right. And it's another pair of colliding galaxies. And here we have a gorgeous close-up of the tidal stream, those bluish features are full of new star clusters, those brand-new stars. In fact, hundreds of thousands of them, being born in individual clusters, exploding in a kind of cosmic fury.
And where that arrow was, was one of the nuclei, one of the centers of the interacting galaxies that causes this train wreck. It's really a kind of cosmic train wreck that you see in action here, with lots of new star formation going on.
And if we come back in a few million years, we're going to see lots and lots of supernovas exploding in those places of massive star formation.
DOBBS: And the distance that the Hubble is reaching out with these images?
SHARA: These are also many millions of light years away. We're talking about perhaps, 200, 300 million light years to these galaxies.
DOBBS: And it wasn't so long ago that -- about 200 million light years, was the extent of our imagination and reach?
SHARA: You just couldn't see that far with anything from the ground. Or if you did, you saw tiny, fuzzy little blurs in the sky. And today we can pick out individual star clusters, even some of the most massive, luminous stars.
And also, in the very background, even beyond those galaxies, at distances of billions of light years, we're seeing thousands and thousands of individual galaxies. This upgraded camera that's now been installed in the telescope has fantastic resolving power and it's letting us see 90 percent of the way back across the history of the universe.
DOBBS: Mike, thanks very much for being with us. Professor Michael Shara of Columbia University. We appreciate it -- and of course, the Museum of Natural History here in New York City.
SHARA: Thanks very much.
DOBBS: Coming up next, we'll take a look at some of your thoughts and we'll hear some of "Their Words," next.
(COMMERCIAL BREAK)
DOBBS: A look at your thoughts now. Many of you writing in with comments on my talk last night with the CEO of Merrill Lynch, David Kamansky. He apologized for the disparaging e-mail written by some analysts at Merrill about stocks that were being publicly backed by Merrill.
David Biddle in Midlothian, Virginia, writes in to say: "It seemed what Komansky was really sorry about was being caught with their hand in the cookie jar and that Merrill's own employees have the temerity to call it as it truly was, at least in their e-mails."
Taking a cue from my commentary last night, David Goldberg wrote in to say: "We cannot afford to have a lack of confidence in our markets at this critical time in our nation's history."
And those are your thoughts. We'd love to hear from you. E-mail us at moneyline@cnn.com. Now from your thoughts to "In Their Words."
(BEGIN VIDEO CLIP)
SHIMON PERES, ISRAELI FOREIGN MINISTER: They will be put to trial like any crime committed in civilian life. But a story begun with the fact, the so-called fact that 3,000 Palestinians lost their life.
Now Saeb Erakat says several hundred. It is totally unfounded. To the best of our knowledge, seven civilian persons lost their life. I regret each life that was lost.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
SAEB ERAKAT, CHIEF PALESTINIAN NEGOTIATOR: I'm afraid that Shimon Peres himself spoke of a massacre, spoke of the human mistakes committed by the Israeli army. Today I heard him speaking that we claimed 3,000 people were killed. No, we did not say that. We said hundreds were killed, and we need to know the truth.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
JAY LENO, HOST, "THE TONIGHT SHOW": How did that happen? I mean, are they proud that their son is a Republican...
(LAUGHTER)
ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: No, they're horrified, actually.
LENO: Really? That's amazing.
FLEISCHER: My parents are very, very principled Democrats. Every now and then the president -- my parents have gotten to know the president very well. And every now and then the president will say, "So, do I have your mother yet?"
I keep having to say, "No, sir, not yet."
(END VIDEO CLIP)
DOBBS: That's MONEYLINE for this Tuesday evening. Thanks for being with us. For all of us here, good night from New York City.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Islamic Charity>
|
|
|
|
|
