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CNN Live At Daybreak

Iraqi Governing Council President Killed in Blast; Iraq Issues Follow British P.M. to Ankara

Aired May 17, 2004 - 06:30   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.


CAROL COSTELLO, CNN ANCHOR: And good morning to you from the CNN global headquarters in Atlanta. I'm Carol Costello. Here are the latest headlines for you.
A suicide car bombing in central Baghdad has killed Izzedine Salim. He is the president of the Iraqi Governing Council. At least three other Iraqis were also killed in the blast at a coalition checkpoint.

At the stroke of midnight, Massachusetts became the first state in the country to legalize gay marriage. That makes the United States one of only four countries in the world where gays and lesbians can marry.

In money news, NBC will spend $40 million on a promotional campaign for its coverage of the Athens Olympic games. The peacock network is shooting for younger viewers aged 18 to 34.

In sports, worldwide heavyweight Roy Jones, Jr. got knocked on his backside. The man, known as the best pound-for-pound fighter, got pounded himself by Antonio Tarber (ph). It's just the second loss in 15 years for Jones. I don't believe we can show you the knockout.

In culture, record producer Quincy Jones scored another hit; this time with his "We are the Future" concert in Rome. The star-studded affair was set up as a benefit for children living in war zones.

(WEATHER BREAK)

COSTELLO: Let's talk more about that massive car bomb this morning and Izzedine Salim, a member of the Iraqi Governing Council. He was killed in that car bombing.

Our senior CNN international editor, David Clinch, joins us now.

You have some new information for us.

DAVID CLINCH, CNN INTERNATIONAL EDITOR: Well, yes, we've been talking this morning, a massive explosion killed Izzedine Salim, the rotating president of the head of the Iraqi Governing Council. That entity is key to this June 30 handover coming up.

L. Paul Bremer, the U.S. administrator in Iraq, called the council together immediately following Salim's killing today. They just announced that they have announced the name of the man who will take over as the president, Al Yawer is the second name, Ghazi al- Yawer. He's a Sunni Muslim. Salim, who was killed this morning, was a Shiite.

So, in some way illustrating what was the positive image of this Governing Council, Shiites, Sunnis and others, Kurds working together to form a new government that could be accepting power after this June 30 handover.

But, obviously, this is not now they envisioned these rotations happening. Al-Yawer was meant to be taking over as the president of the Governing Council on June the 1st. He takes over today because the man who was president was killed in this suicide bombing this morning.

And, of course, just to backtrack a little about how this happened, Mr. Salim was going through a checkpoint. He was in a car.

CLINCH: Right.

COSTELLO: A red car pulled up behind him, exploded, and that's how he was killed. The interesting thing we learned from Rob Norland (ph), the "Newsweek" reporter, was that there was a whole convoy of cars, and inside of those cars were more members of the Iraqi Governing Council.

CLINCH: Right, we have -- as yet not 100 percent confirmed, but we have heard that this was a convoy of many cars, including other Governing Council members heading into a scheduled Governing Council meeting today. The Governing Council right in the middle of urgent negotiations with the U.S. over exactly how much power will be handed over on June 30.

So, this is just not run-of-the-mill meetings. There are some urgent issues. Those become even more urgent now. This new president will have to get up-to-speed very quickly, dealing directly with the U.S. about whether or not this new entity after June 30 will control security, will control the military, will control the money, the oil. All of those issues have to be sorted out.

Even in the best of worlds between now and June 30, 40 or so days to go, that's a difficult task. When you now know that each and every Governing Council member is a target for whoever is carrying out these attacks, that must makes the environment that much more difficult.

COSTELLO: Of course, we'll continue to follow this story. David Clinch, many thanks to you.

Other stories in Iraq we're tracking this Monday morning. The U.S. military takes reporters on another tour of the Abu Ghraib prison today. The new commander of detainee operations, Major General Geoffrey Miller, will be there to answer questions.

Fighting persists for a third day in the Iraqi city of Nasiriyah, where coalition soldiers from Italy are battling the militia of a radical cleric. Ten Italian soldiers have been wounded, one of them fatally -- one was killed in other words.

A key member of the Iraqi Governing Council, Adnon Pachachi (ph), says the Iraqi government taking power on June 30 could expel coalition military forces from the country. But Pachachi says that is unlikely because security is now the main concern.

Britain's prime minister, Tony Blair, arrives in Ankara this morning for talks on Turkey's bid to join the European Union. The controversy over Iraq could follow Blair to Turkey, where thousands demonstrated last week protesting the abuse of Iraqi prisoners.

CNN's Alphonso Van Marsh live on the phone for us in Ankara.

Tell us more -- Alphonso.

ALPHONSO VAN MARSH, CNN CORRESPONDENT: Well, good morning. A lot of very interesting things going on here, particularly with Tony Blair coming into town. Four small bomb blasts in front of British interests, the HSBC banks here. There are no reported injuries.

And it's no coincidence with the prime minister coming into town to meet with Turkish Prime Minister Tayyip Erdogan.

The interesting thing here is that there is news coming out that the British prime minister and U.S. President George W. Bush are coming up to some sort of reported end game, a way of pulling troops out of Iraq towards the end of June.

Now, this worries Turkey, Turkey being right next door to Iraq, sharing a border with Iraq, wondering what exactly that plan is. There is nervousness here that if there is a continuing worsening situation in Iraq that thousands of refugees could be coming on over into Turkey, and that has Turkish officials very, very worried.

We're told by diplomats here, by Foreign Ministry officials here, that those talks that Tony Blair will have will definitely focus on Iraq, and talk about what exactly is Prime Minister Tony Blair and U.S. President George W. Bush's plan at the end of June -- Carol.

COSTELLO: I know that's so intriguing that they're coming up with a so-called exit strategy. Does that mean that Britain wants to pull its troops out of there as soon as possible? Is that part of the motivating factor of this?

VAN MARSH: Well, British officials out of Downing Street have said that it's a constant situation that they're reviewing and considering going over. Just as recently of last week, there were reports that there may be more British troops heading out to Iraq. But, again, that's not confirmed either. Officials say they're always talking about it, always considering it.

At least here from Turkey, Turkish officials want to know what's going on, what's the end game, what's the plan. As some of our viewers might remember, Turkey was strongly opposed to the war. It did not agree to U.S. requests to allow attacks on Iraq to be launched from Turkish soil.

So, when the Turkish prime minister and the Turkish president sit down with British Prime Minister Tony Blair, they want to know what's going, what's the plan, what's the deal. So, when the troops eventually leave and when the power is handed over to the Iraqis, how can this keep Turkey from -- as one senior official in the Foreign Ministry told me -- go into a deep hole?

COSTELLO: Well, hopefully we'll learn more today. Alphonso Van Marsh on the phone from Ankara, Turkey, this morning.

Still to come on DAYBREAK, how convinced are you when you see the latest ads for cars? I'm talking about TV commercials. Do you like the ads for cars and credit cards, beer and more? We're going to talk to an advertising expert as the industry prepares to honor its best.

Plus, time to sugarcoat bad news in the donut biz. What's really behind one company's less-than-stellar performance?

(COMMERCIAL BREAK)

COSTELLO: Time for a little business buzz. Some Krispy Kreme investors aren't buying the low-carb excuse.

Carrie Lee reports live from the Nasdaq Marketsite.

So, what is the reason?

CARRIE LEE, CNN FINANCIAL NEWS: Well, they are filing a couple of lawsuits in North Carolina and in New York, Carol -- this is Krispy Kreme shareholders -- alleging that the company misled investors about the direction in which its business was headed.

Remember earlier this month the company issued its first-ever profit warning, basically saying that the low-carb diets a lot of people are on are affecting the company's business. Well, now shareholders are alleging that the company basically grew too much too fast, first said that low-carb diets wouldn't affect the business, then kind of switched gears and said that it is. Also, they underestimated the competition from Dunkin Donuts, and they say that the wholesale business of Krispy Kreme undermined sales at its retail stores.

So, a lot of reasons here, but mainly that low-carb craze really this seems like the front and center reason.

Krispy Kreme, by the way, when it issued that profit warning, saw a big drop-off in the shares. The stock now has fallen by about a third since that warning first came out.

COSTELLO: Wow!

LEE: So, it's certainly taking a bite out of the company's stock price. We'll see what happens with these lawsuits. Krispy Kreme is not immediately commenting on these lawsuits filed. It's a very interesting story.

COSTELLO: Very interesting.

A quick look at the futures before you go. LEE: Yes, futures -- you might be able to guess this -- are looking very, very weak right now. We have oil, New York crude hitting a new high in electronic trading this morning at about 41.83 per barrel. And then, of course, that assassination in Iraq is really weighing on investors' minds as well. So, people should brace themselves for some serious red arrows at the 9:30 opening bell today -- Carol.

COSTELLO: Carrie Lee live from the Nasdaq Marketsite.

Your news, money, weather and sports. It's 6:43 Eastern Time. Here's what's all new this morning.

A suicide car bomber in Baghdad has killed the leader of the Iraqi Governing Council. These pictures just in to us this morning. U.S. troops say the blast killed at least four other people.

It's legal. Gays in Massachusetts are getting marriage licenses this morning. Massachusetts is the first state in the nation to legalize same-sex unions.

In money news, the Hummer is getting hammered. Sales for the biggest and baddest sports utility vehicle have fallen for eight straight months, and now dealers are offering their first Hummer rebates.

In sports, track star Marianne Jones (ph) is vowing to sue if she's barred from this summer's Olympic games. It's possible because of a federal investigation into steroid sales by a lab linked to the Olympic gold medal winner.

In culture, a museum chronicling the life of actor James Dean has opened just outside of Dean's hometown of Fairmont, Indiana. Dean died in a 1955 car crash at the age of 24.

(WEATHER BREAK)

COSTELLO: Those are the latest headlines for you.

Keeping up with the Jones, and we all know now there's only one Jones to keep up with in the horseracing world. Coming up, can Smarty stack up to a Triple Crown title?

Plus, why did it take so very long to finally welcome in these little kitties? We'll tell you more and show you more cute animal pictures when we return.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Today we're going to test a tractor beam from (UNINTELLIGIBLE) commando. Nice, dude. Nice job. Nice job.

UNIDENTIFIED MALE: Turn it off!

(END VIDEO CLIP)

COSTELLO: That was pretty funny, wasn't it? This is one of the many catchy spots up for Clio Awards this year. The 45th annual event honors the best in advertising of all forms -- TV, radio, print and more from around the world.

Joining me now with more on what's hot in the competition this year is "USA Today's" advertising reporter Teresa Howard (ph). She joins us live from New York.

Welcome, Teresa (ph).

UNIDENTIFIED FEMALE: Hi, Carol. How are you?

COSTELLO: I'm fine. So, should we show one more commercial before we get to you?

UNIDENTIFIED FEMALE: Sure.

COSTELLO: This is the Honda commercial, and explain before we show it what this is, because it's very clever.

UNIDENTIFIED FEMALE: Yes, this is a great way to take a look at the innards of vehicle without getting too technical on people, and it's a really -- it's a great piece of art. It's very rhythmic, and it just shows practically every component the vehicle.

COSTELLO: And it's become very hot on the Internet, hasn't it?

UNIDENTIFIED FEMALE: Yes, people are really just kind of getting grossed from watching it. Like I said, it's very rhythmic and it just uses, you know, kind of that classic form of, you know, whatever the technical term is, sorry. But kind of that domino effect of down the line and just how it works.

COSTELLO: How interesting, though, that people would seek out a TV commercial on the Internet.

UNIDENTIFIED FEMALE: Yes, I think you're find that more. It's really interesting. As much as people hate advertising, as an ad it's effective and interesting and intriguing, they will take time out and watch it.

COSTELLO: Unbelievable. Let's look at another competitor, the Bud Light commercials, which are very strange and, you know, kind of sexist, I guess.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Since then, the Bud Light Institute has continuously found ways to keep women occupied, so men could go out with their friends and maybe have a cold...

(END VIDEO CLIP)

COSTELLO: So, you hear that? They're finding ways to keep women occupied because men want to go out and have a beer.

UNIDENTIFIED FEMALE: It's a little sexist definitely, but I think it makes fun of men as much as it does, you know, kind of the idea of women, you know, wanting to infringe on men's time, and men really just wanting their own time. In a way, I think it makes fun of men more because of the lengths they'll go to.

COSTELLO: Do you think? Well, let's ask two men, because I have two men right here, Rob Marciano and Chris Cotter. Do you think those Bud Light commercials make fun of men as much as women?

CHRIS COTTER, CNN SPORTS CONTRIBUTOR: If that's what it takes to justify them, yes. We're making fun of ourselves there in order to get more free time.

COSTELLO: OK, there you have it. OK. Back to you Teresa.

American Express, another commercial up in the competition for a Clio Award. Let's take a look at that, and this one is really special. Tell us why.

UNIDENTIFIED FEMALE: Well, I think it's great, because Morton Scorsese (ph) just take this whole director ability and just applies it to everyday film making for his nephew's fifth birthday, which is just great, because he's a great film maker, and it just kind of shows, you know, the lengths he'll go to. But what it also does for American Express is show, you know, don't forget you can use your American Express cards to make everyday purchases, such as films.

COSTELLO: Unbelievable. This one has kind of an interesting premise, (UNINTELLIGIBLE) beer, the tongue.

UNIDENTIFIED FEMALE: Oh, god, this is...

COSTELLO: Oh, I don't remember seeing this in this country.

UNIDENTIFIED FEMALE: Yes, I think it ran in Australia, I think it was.

COSTELLO: You should see the look on Chris and Rob's faces.

UNIDENTIFIED FEMALE: It is gross. It's really gross.

COSTELLO: Is this kind of stuff really effective? Does this get people to buy the product?

UNIDENTIFIED FEMALE: You know, I think you really have to take into account certain products are really targeted to a certain audience, and I think for probably the guys this is targeted to, you know, they might dig it. But I'm not the target audience.

COSTELLO: All right, well, we will be on the edge of our seats waiting to see who wins the Clio Awards this year. Teresa Howard (ph) joining us live from New York, thank you very much.

UNIDENTIFIED FEMALE: Thanks, Carol.

COSTELLO: For the third straight year, the same horse has won the first two races of the Triple Crown, but Funny Side and War Emblem failed to deliver. Can Smarty Jones outsmart the odds?

Let's get right to sports with CNN's sports contributor Chris Cotter.

Did you like that intro?

COTTER: Oh, it was wonderful. Smarty Jones is undefeated, though, you know. I mean, the other two were not. Smarty Jones is undefeated. Smarty Jones decimated the field this past weekend at the Preakness.

COSTELLO: Made history.

COTTER: Yes, 12 lengths, dominating the entire field and the entire race. And, boy, the Belmont, as you can see here, Smarty Jones is just no contest in the final stretch. But the Belmont loves this, because think about it now, three years in a row people have actually been interested in the Belmont Stakes. If it wasn't for Smarty Jones here this year making it the first two, no one would even care about this race on June 5.

COSTELLO: Well, it's just strange to me that this horse just comes out of nowhere, wins two big races, and now he's up for a Triple Crown.

COTTER: I mean, that's kind of the way it is in horseracing, though. None of us, unless you're really engrossed in this sport, none of us know who any of these horses are. We don't know any of the names until they make a name for themselves at the Kentucky Derby. And every now and then a horse will do it again at the Preakness as Smarty Jones did. And then those horses become familiar to us.

COSTELLO: That's true.

Rob, you're just sitting there going, oh, horseracing.

ROB MARCIANO, CNN METEOROLOGIST: I know they have a great life out there. Win or lose, what does he do after the Preakness or the Belmont?

COTTER: My guess is, I guess he'll finish out the rest of the year. And I don't know. They can race for a couple of years, but after that it's out to stud. And you're right. It's a pretty good life from that point forward, right?

MARCIANO: I bet.

COTTER: You can race a couple of years and then you're done.

COSTELLO: And the owners -- that's right. The owners get even richer than they already are and life is good for all. That's right.

Let's talk a little bit about basketball and the Lakers. COTTER: Boy, I tell you, in this NBA second round, the first round was a bunch of snoozers, all right? The series, they were just terrible, even the one that won seven games was awful. But look at this shot right here. Derrick Fisher (ph) scoring after Tim Dunkin (ph) had put the Spurs up. It looked the Spurs were going to be up for good, point four left, and Derrick Fisher (ph) gets the inbound pass, and he scores.

This is in San Antonio in game five over the weekend, then the Lakers went ahead and took it in game six.

But if you look at the other series out there and the other story lines, Sacramento trying to get it done for the first time. They've been so close before. Whether you have, you know, Minnesota, they haven't had much playoff success. Will they get it this year with the MVP and Kevin Garnett?

In the East, seven games series with the Nets, the two-time defending Eastern Conference champion, you have the Heat, who is kind of a fan favorite right now. This is probably the best second round in the NBA that we've had in maybe 15 years, in my opinion. The first round was terrible. The second round has been phenomenal. It's been must-see TV every single night.

COSTELLO: You seem so excited about it. I just cannot get into the playoffs of basketball, because they last too long.

COTTER: Well, this year is so much better, though. They do last a long time, but every single game this year is a game you have to watch. This Lakers first series has been phenomenal with the Spurs winning the first two. Lakers taking the next four. Watch out for them. They seem to be peaking right now. Everything seems to be clicking for them.

COSTELLO: OK.

COTTER: And they're the team to beat unfortunately.

COSTELLO: I will watch.

MARCIANO: Yes, exactly.

COTTER: Unfortunately.

MARCIANO: He's not too happy that they won.

COTTER: I'm really not a big fan.

COSTELLO: I don't think so.

COTTER: They're exciting to watch. It's great for business when they win and they advance, but I'm not a fan.

COSTELLO: Aren't they sort of the New York Yankees of the basketball world?

COTTER: They have a lot going on.

(CROSSTALK)

COSTELLO: I'm sorry. I'm sorry. I'm sorry. Thank you, Chris Cotter.

We're back after a quick break, but first the latest headlines for you.

(COMMERCIAL BREAK)

COSTELLO: It's that happy time in our show.

MARCIANO: This is new to me. I'm excited about it.

COSTELLO: Well, welcome to the DAYBREAK coffee mug award-winning segment. Here goes.

This is our DAYBREAK winner from the coffee quiz on Friday. We asked these questions: Tennis star Martina Navratilova requested a wild card to play in what tournament? The answer was the French Open. And the second question, according to Julie Vallese's report on totaling the family car, what's the average cost of car repairs? The answer: $2,000.

Drum roll please. The winner is Hang Vu from Pflugerville, Texas. Pflugerville with a "P." Wouldn't it be cool if Pfizer was based on Pflugerville?

MARCIANO: A big state. I have no idea -- he gets one of these...

COSTELLO: He gets a DAYBREAK coffee mug. But, please, get to today's questions, Rob.

MARCIANO: OK. Here is your chance to win a DAYBREAK coffee mug. Today's question is: As we mark the 50th anniversary of the "Brown vs. Board of Education" decision, what Topeka school did Linda Brown attend? And, how many Clio advertising award categories are there?

COSTELLO: And, of course, we will name the winner tomorrow. Daybreak@CNN.com. Daybreak@CNN.com.

From the CNN global headquarters in Atlanta, I'm Carol Costello, along with Rob Marciano. "AMERICAN MORNING" starts right now.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.


Aired May 17, 2004 - 06:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: And good morning to you from the CNN global headquarters in Atlanta. I'm Carol Costello. Here are the latest headlines for you.
A suicide car bombing in central Baghdad has killed Izzedine Salim. He is the president of the Iraqi Governing Council. At least three other Iraqis were also killed in the blast at a coalition checkpoint.

At the stroke of midnight, Massachusetts became the first state in the country to legalize gay marriage. That makes the United States one of only four countries in the world where gays and lesbians can marry.

In money news, NBC will spend $40 million on a promotional campaign for its coverage of the Athens Olympic games. The peacock network is shooting for younger viewers aged 18 to 34.

In sports, worldwide heavyweight Roy Jones, Jr. got knocked on his backside. The man, known as the best pound-for-pound fighter, got pounded himself by Antonio Tarber (ph). It's just the second loss in 15 years for Jones. I don't believe we can show you the knockout.

In culture, record producer Quincy Jones scored another hit; this time with his "We are the Future" concert in Rome. The star-studded affair was set up as a benefit for children living in war zones.

(WEATHER BREAK)

COSTELLO: Let's talk more about that massive car bomb this morning and Izzedine Salim, a member of the Iraqi Governing Council. He was killed in that car bombing.

Our senior CNN international editor, David Clinch, joins us now.

You have some new information for us.

DAVID CLINCH, CNN INTERNATIONAL EDITOR: Well, yes, we've been talking this morning, a massive explosion killed Izzedine Salim, the rotating president of the head of the Iraqi Governing Council. That entity is key to this June 30 handover coming up.

L. Paul Bremer, the U.S. administrator in Iraq, called the council together immediately following Salim's killing today. They just announced that they have announced the name of the man who will take over as the president, Al Yawer is the second name, Ghazi al- Yawer. He's a Sunni Muslim. Salim, who was killed this morning, was a Shiite.

So, in some way illustrating what was the positive image of this Governing Council, Shiites, Sunnis and others, Kurds working together to form a new government that could be accepting power after this June 30 handover.

But, obviously, this is not now they envisioned these rotations happening. Al-Yawer was meant to be taking over as the president of the Governing Council on June the 1st. He takes over today because the man who was president was killed in this suicide bombing this morning.

And, of course, just to backtrack a little about how this happened, Mr. Salim was going through a checkpoint. He was in a car.

CLINCH: Right.

COSTELLO: A red car pulled up behind him, exploded, and that's how he was killed. The interesting thing we learned from Rob Norland (ph), the "Newsweek" reporter, was that there was a whole convoy of cars, and inside of those cars were more members of the Iraqi Governing Council.

CLINCH: Right, we have -- as yet not 100 percent confirmed, but we have heard that this was a convoy of many cars, including other Governing Council members heading into a scheduled Governing Council meeting today. The Governing Council right in the middle of urgent negotiations with the U.S. over exactly how much power will be handed over on June 30.

So, this is just not run-of-the-mill meetings. There are some urgent issues. Those become even more urgent now. This new president will have to get up-to-speed very quickly, dealing directly with the U.S. about whether or not this new entity after June 30 will control security, will control the military, will control the money, the oil. All of those issues have to be sorted out.

Even in the best of worlds between now and June 30, 40 or so days to go, that's a difficult task. When you now know that each and every Governing Council member is a target for whoever is carrying out these attacks, that must makes the environment that much more difficult.

COSTELLO: Of course, we'll continue to follow this story. David Clinch, many thanks to you.

Other stories in Iraq we're tracking this Monday morning. The U.S. military takes reporters on another tour of the Abu Ghraib prison today. The new commander of detainee operations, Major General Geoffrey Miller, will be there to answer questions.

Fighting persists for a third day in the Iraqi city of Nasiriyah, where coalition soldiers from Italy are battling the militia of a radical cleric. Ten Italian soldiers have been wounded, one of them fatally -- one was killed in other words.

A key member of the Iraqi Governing Council, Adnon Pachachi (ph), says the Iraqi government taking power on June 30 could expel coalition military forces from the country. But Pachachi says that is unlikely because security is now the main concern.

Britain's prime minister, Tony Blair, arrives in Ankara this morning for talks on Turkey's bid to join the European Union. The controversy over Iraq could follow Blair to Turkey, where thousands demonstrated last week protesting the abuse of Iraqi prisoners.

CNN's Alphonso Van Marsh live on the phone for us in Ankara.

Tell us more -- Alphonso.

ALPHONSO VAN MARSH, CNN CORRESPONDENT: Well, good morning. A lot of very interesting things going on here, particularly with Tony Blair coming into town. Four small bomb blasts in front of British interests, the HSBC banks here. There are no reported injuries.

And it's no coincidence with the prime minister coming into town to meet with Turkish Prime Minister Tayyip Erdogan.

The interesting thing here is that there is news coming out that the British prime minister and U.S. President George W. Bush are coming up to some sort of reported end game, a way of pulling troops out of Iraq towards the end of June.

Now, this worries Turkey, Turkey being right next door to Iraq, sharing a border with Iraq, wondering what exactly that plan is. There is nervousness here that if there is a continuing worsening situation in Iraq that thousands of refugees could be coming on over into Turkey, and that has Turkish officials very, very worried.

We're told by diplomats here, by Foreign Ministry officials here, that those talks that Tony Blair will have will definitely focus on Iraq, and talk about what exactly is Prime Minister Tony Blair and U.S. President George W. Bush's plan at the end of June -- Carol.

COSTELLO: I know that's so intriguing that they're coming up with a so-called exit strategy. Does that mean that Britain wants to pull its troops out of there as soon as possible? Is that part of the motivating factor of this?

VAN MARSH: Well, British officials out of Downing Street have said that it's a constant situation that they're reviewing and considering going over. Just as recently of last week, there were reports that there may be more British troops heading out to Iraq. But, again, that's not confirmed either. Officials say they're always talking about it, always considering it.

At least here from Turkey, Turkish officials want to know what's going on, what's the end game, what's the plan. As some of our viewers might remember, Turkey was strongly opposed to the war. It did not agree to U.S. requests to allow attacks on Iraq to be launched from Turkish soil.

So, when the Turkish prime minister and the Turkish president sit down with British Prime Minister Tony Blair, they want to know what's going, what's the plan, what's the deal. So, when the troops eventually leave and when the power is handed over to the Iraqis, how can this keep Turkey from -- as one senior official in the Foreign Ministry told me -- go into a deep hole?

COSTELLO: Well, hopefully we'll learn more today. Alphonso Van Marsh on the phone from Ankara, Turkey, this morning.

Still to come on DAYBREAK, how convinced are you when you see the latest ads for cars? I'm talking about TV commercials. Do you like the ads for cars and credit cards, beer and more? We're going to talk to an advertising expert as the industry prepares to honor its best.

Plus, time to sugarcoat bad news in the donut biz. What's really behind one company's less-than-stellar performance?

(COMMERCIAL BREAK)

COSTELLO: Time for a little business buzz. Some Krispy Kreme investors aren't buying the low-carb excuse.

Carrie Lee reports live from the Nasdaq Marketsite.

So, what is the reason?

CARRIE LEE, CNN FINANCIAL NEWS: Well, they are filing a couple of lawsuits in North Carolina and in New York, Carol -- this is Krispy Kreme shareholders -- alleging that the company misled investors about the direction in which its business was headed.

Remember earlier this month the company issued its first-ever profit warning, basically saying that the low-carb diets a lot of people are on are affecting the company's business. Well, now shareholders are alleging that the company basically grew too much too fast, first said that low-carb diets wouldn't affect the business, then kind of switched gears and said that it is. Also, they underestimated the competition from Dunkin Donuts, and they say that the wholesale business of Krispy Kreme undermined sales at its retail stores.

So, a lot of reasons here, but mainly that low-carb craze really this seems like the front and center reason.

Krispy Kreme, by the way, when it issued that profit warning, saw a big drop-off in the shares. The stock now has fallen by about a third since that warning first came out.

COSTELLO: Wow!

LEE: So, it's certainly taking a bite out of the company's stock price. We'll see what happens with these lawsuits. Krispy Kreme is not immediately commenting on these lawsuits filed. It's a very interesting story.

COSTELLO: Very interesting.

A quick look at the futures before you go. LEE: Yes, futures -- you might be able to guess this -- are looking very, very weak right now. We have oil, New York crude hitting a new high in electronic trading this morning at about 41.83 per barrel. And then, of course, that assassination in Iraq is really weighing on investors' minds as well. So, people should brace themselves for some serious red arrows at the 9:30 opening bell today -- Carol.

COSTELLO: Carrie Lee live from the Nasdaq Marketsite.

Your news, money, weather and sports. It's 6:43 Eastern Time. Here's what's all new this morning.

A suicide car bomber in Baghdad has killed the leader of the Iraqi Governing Council. These pictures just in to us this morning. U.S. troops say the blast killed at least four other people.

It's legal. Gays in Massachusetts are getting marriage licenses this morning. Massachusetts is the first state in the nation to legalize same-sex unions.

In money news, the Hummer is getting hammered. Sales for the biggest and baddest sports utility vehicle have fallen for eight straight months, and now dealers are offering their first Hummer rebates.

In sports, track star Marianne Jones (ph) is vowing to sue if she's barred from this summer's Olympic games. It's possible because of a federal investigation into steroid sales by a lab linked to the Olympic gold medal winner.

In culture, a museum chronicling the life of actor James Dean has opened just outside of Dean's hometown of Fairmont, Indiana. Dean died in a 1955 car crash at the age of 24.

(WEATHER BREAK)

COSTELLO: Those are the latest headlines for you.

Keeping up with the Jones, and we all know now there's only one Jones to keep up with in the horseracing world. Coming up, can Smarty stack up to a Triple Crown title?

Plus, why did it take so very long to finally welcome in these little kitties? We'll tell you more and show you more cute animal pictures when we return.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Today we're going to test a tractor beam from (UNINTELLIGIBLE) commando. Nice, dude. Nice job. Nice job.

UNIDENTIFIED MALE: Turn it off!

(END VIDEO CLIP)

COSTELLO: That was pretty funny, wasn't it? This is one of the many catchy spots up for Clio Awards this year. The 45th annual event honors the best in advertising of all forms -- TV, radio, print and more from around the world.

Joining me now with more on what's hot in the competition this year is "USA Today's" advertising reporter Teresa Howard (ph). She joins us live from New York.

Welcome, Teresa (ph).

UNIDENTIFIED FEMALE: Hi, Carol. How are you?

COSTELLO: I'm fine. So, should we show one more commercial before we get to you?

UNIDENTIFIED FEMALE: Sure.

COSTELLO: This is the Honda commercial, and explain before we show it what this is, because it's very clever.

UNIDENTIFIED FEMALE: Yes, this is a great way to take a look at the innards of vehicle without getting too technical on people, and it's a really -- it's a great piece of art. It's very rhythmic, and it just shows practically every component the vehicle.

COSTELLO: And it's become very hot on the Internet, hasn't it?

UNIDENTIFIED FEMALE: Yes, people are really just kind of getting grossed from watching it. Like I said, it's very rhythmic and it just uses, you know, kind of that classic form of, you know, whatever the technical term is, sorry. But kind of that domino effect of down the line and just how it works.

COSTELLO: How interesting, though, that people would seek out a TV commercial on the Internet.

UNIDENTIFIED FEMALE: Yes, I think you're find that more. It's really interesting. As much as people hate advertising, as an ad it's effective and interesting and intriguing, they will take time out and watch it.

COSTELLO: Unbelievable. Let's look at another competitor, the Bud Light commercials, which are very strange and, you know, kind of sexist, I guess.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Since then, the Bud Light Institute has continuously found ways to keep women occupied, so men could go out with their friends and maybe have a cold...

(END VIDEO CLIP)

COSTELLO: So, you hear that? They're finding ways to keep women occupied because men want to go out and have a beer.

UNIDENTIFIED FEMALE: It's a little sexist definitely, but I think it makes fun of men as much as it does, you know, kind of the idea of women, you know, wanting to infringe on men's time, and men really just wanting their own time. In a way, I think it makes fun of men more because of the lengths they'll go to.

COSTELLO: Do you think? Well, let's ask two men, because I have two men right here, Rob Marciano and Chris Cotter. Do you think those Bud Light commercials make fun of men as much as women?

CHRIS COTTER, CNN SPORTS CONTRIBUTOR: If that's what it takes to justify them, yes. We're making fun of ourselves there in order to get more free time.

COSTELLO: OK, there you have it. OK. Back to you Teresa.

American Express, another commercial up in the competition for a Clio Award. Let's take a look at that, and this one is really special. Tell us why.

UNIDENTIFIED FEMALE: Well, I think it's great, because Morton Scorsese (ph) just take this whole director ability and just applies it to everyday film making for his nephew's fifth birthday, which is just great, because he's a great film maker, and it just kind of shows, you know, the lengths he'll go to. But what it also does for American Express is show, you know, don't forget you can use your American Express cards to make everyday purchases, such as films.

COSTELLO: Unbelievable. This one has kind of an interesting premise, (UNINTELLIGIBLE) beer, the tongue.

UNIDENTIFIED FEMALE: Oh, god, this is...

COSTELLO: Oh, I don't remember seeing this in this country.

UNIDENTIFIED FEMALE: Yes, I think it ran in Australia, I think it was.

COSTELLO: You should see the look on Chris and Rob's faces.

UNIDENTIFIED FEMALE: It is gross. It's really gross.

COSTELLO: Is this kind of stuff really effective? Does this get people to buy the product?

UNIDENTIFIED FEMALE: You know, I think you really have to take into account certain products are really targeted to a certain audience, and I think for probably the guys this is targeted to, you know, they might dig it. But I'm not the target audience.

COSTELLO: All right, well, we will be on the edge of our seats waiting to see who wins the Clio Awards this year. Teresa Howard (ph) joining us live from New York, thank you very much.

UNIDENTIFIED FEMALE: Thanks, Carol.

COSTELLO: For the third straight year, the same horse has won the first two races of the Triple Crown, but Funny Side and War Emblem failed to deliver. Can Smarty Jones outsmart the odds?

Let's get right to sports with CNN's sports contributor Chris Cotter.

Did you like that intro?

COTTER: Oh, it was wonderful. Smarty Jones is undefeated, though, you know. I mean, the other two were not. Smarty Jones is undefeated. Smarty Jones decimated the field this past weekend at the Preakness.

COSTELLO: Made history.

COTTER: Yes, 12 lengths, dominating the entire field and the entire race. And, boy, the Belmont, as you can see here, Smarty Jones is just no contest in the final stretch. But the Belmont loves this, because think about it now, three years in a row people have actually been interested in the Belmont Stakes. If it wasn't for Smarty Jones here this year making it the first two, no one would even care about this race on June 5.

COSTELLO: Well, it's just strange to me that this horse just comes out of nowhere, wins two big races, and now he's up for a Triple Crown.

COTTER: I mean, that's kind of the way it is in horseracing, though. None of us, unless you're really engrossed in this sport, none of us know who any of these horses are. We don't know any of the names until they make a name for themselves at the Kentucky Derby. And every now and then a horse will do it again at the Preakness as Smarty Jones did. And then those horses become familiar to us.

COSTELLO: That's true.

Rob, you're just sitting there going, oh, horseracing.

ROB MARCIANO, CNN METEOROLOGIST: I know they have a great life out there. Win or lose, what does he do after the Preakness or the Belmont?

COTTER: My guess is, I guess he'll finish out the rest of the year. And I don't know. They can race for a couple of years, but after that it's out to stud. And you're right. It's a pretty good life from that point forward, right?

MARCIANO: I bet.

COTTER: You can race a couple of years and then you're done.

COSTELLO: And the owners -- that's right. The owners get even richer than they already are and life is good for all. That's right.

Let's talk a little bit about basketball and the Lakers. COTTER: Boy, I tell you, in this NBA second round, the first round was a bunch of snoozers, all right? The series, they were just terrible, even the one that won seven games was awful. But look at this shot right here. Derrick Fisher (ph) scoring after Tim Dunkin (ph) had put the Spurs up. It looked the Spurs were going to be up for good, point four left, and Derrick Fisher (ph) gets the inbound pass, and he scores.

This is in San Antonio in game five over the weekend, then the Lakers went ahead and took it in game six.

But if you look at the other series out there and the other story lines, Sacramento trying to get it done for the first time. They've been so close before. Whether you have, you know, Minnesota, they haven't had much playoff success. Will they get it this year with the MVP and Kevin Garnett?

In the East, seven games series with the Nets, the two-time defending Eastern Conference champion, you have the Heat, who is kind of a fan favorite right now. This is probably the best second round in the NBA that we've had in maybe 15 years, in my opinion. The first round was terrible. The second round has been phenomenal. It's been must-see TV every single night.

COSTELLO: You seem so excited about it. I just cannot get into the playoffs of basketball, because they last too long.

COTTER: Well, this year is so much better, though. They do last a long time, but every single game this year is a game you have to watch. This Lakers first series has been phenomenal with the Spurs winning the first two. Lakers taking the next four. Watch out for them. They seem to be peaking right now. Everything seems to be clicking for them.

COSTELLO: OK.

COTTER: And they're the team to beat unfortunately.

COSTELLO: I will watch.

MARCIANO: Yes, exactly.

COTTER: Unfortunately.

MARCIANO: He's not too happy that they won.

COTTER: I'm really not a big fan.

COSTELLO: I don't think so.

COTTER: They're exciting to watch. It's great for business when they win and they advance, but I'm not a fan.

COSTELLO: Aren't they sort of the New York Yankees of the basketball world?

COTTER: They have a lot going on.

(CROSSTALK)

COSTELLO: I'm sorry. I'm sorry. I'm sorry. Thank you, Chris Cotter.

We're back after a quick break, but first the latest headlines for you.

(COMMERCIAL BREAK)

COSTELLO: It's that happy time in our show.

MARCIANO: This is new to me. I'm excited about it.

COSTELLO: Well, welcome to the DAYBREAK coffee mug award-winning segment. Here goes.

This is our DAYBREAK winner from the coffee quiz on Friday. We asked these questions: Tennis star Martina Navratilova requested a wild card to play in what tournament? The answer was the French Open. And the second question, according to Julie Vallese's report on totaling the family car, what's the average cost of car repairs? The answer: $2,000.

Drum roll please. The winner is Hang Vu from Pflugerville, Texas. Pflugerville with a "P." Wouldn't it be cool if Pfizer was based on Pflugerville?

MARCIANO: A big state. I have no idea -- he gets one of these...

COSTELLO: He gets a DAYBREAK coffee mug. But, please, get to today's questions, Rob.

MARCIANO: OK. Here is your chance to win a DAYBREAK coffee mug. Today's question is: As we mark the 50th anniversary of the "Brown vs. Board of Education" decision, what Topeka school did Linda Brown attend? And, how many Clio advertising award categories are there?

COSTELLO: And, of course, we will name the winner tomorrow. Daybreak@CNN.com. Daybreak@CNN.com.

From the CNN global headquarters in Atlanta, I'm Carol Costello, along with Rob Marciano. "AMERICAN MORNING" starts right now.

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