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American Morning

Giant Merger Between Two of Biggest, Oldest Names in Retail; 'Monday Night Football' Colliding with Sultry 'Housewives'

Aired November 17, 2004 - 07:00   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.


SOLEDAD O'BRIEN, CNN ANCHOR: Breaking news just in the last hour. A giant merger between two of the biggest and oldest names in retail.
Taking the Iraqi city of Mosul back from insurgents this morning, we speak live to the U.S. commander there.

And the sports classic, Monday Night Football, colliding with the sultry housewives and America's hottest new show.

Are you ready for some controversy, on this AMERICAN MORNING.

ANNOUNCER: From the CNN broadcast center in New York, this is AMERICAN MORNING, with Bill Hemmer and Soledad O'Brien.

BILL HEMMER, CNN ANCHOR: Good morning, everybody. 7:00 in New York. Good to have you along with us today?

Good morning to you as well.

O'BRIEN: Good morning to you. Welcome back. Did you have a nice birthday?

HEMMER: Yes, I did.

O'BRIEN: Because we celebrated Friday, but the day was Sunday.

HEMMER: I had a hard time getting over the whole 40.

(CROSSTALK)

O'BRIEN: That's cruel, sorry.

HEMMER: Tell me about it.

Good morning, everyone. Much more to talk about this morning on the cabinet changes in D.C., including the headliner, Condoleezza Rice, taking over the Department of State. What does this choice say about the inner power struggles in D.C.? Jeff Greenfield has some answers in a moment.

O'BRIEN: Also this morning, ABC apologizing now for a little skit it used to introduce this week's Monday Night Football game. In the skit, Nicolette Sheridan of the hit show "Desperate Housewives" plays seductress with the Philadelphia Eagles star Terrell Owens. The towel drops there, all the controversy starts with that. We're going to talk a little bit more about all of this with media columnist from "Vanity Fair" Michael Wolff.

HEMMER: I smell a ratings rat.

O'BRIEN: You think?

HEMMER: Jack Cafferty.

JACK CAFFERTY, CNN ANCHOR: The NFL really needs to get over itself on this, OK. I mean, it's not a big deal.

O'BRIEN: Lots of hew and cry.

CAFFERTY: Yes, about nothing.

O'BRIEN: Another issue that's causing some controversy is the issue of whether or not television cameras belong on a battlefield with soldiers during wartime, prompted by the footage of that Marine shooting the insurgent inside that mosque. We'll take a look at that issue and some of the reaction to it in a couple of minutes.

HEMMER: All right, Jack, thanks.

Headlines, top of the hour. Good morning to, Heidi Collins, with us as well.

O'BRIEN: And good morning to you, guys. Nice to see you again.

Now in the news this morning, U.S. and Iraqi forces are stepping up operations in Mosul. Hundreds of troops have been searching the city for insurgents. Earlier, insurgents fired mortar rounds at a police station. Military officials say they are assessing the damage now. Violence erupted almost one week ago after a series of attacks on police stations and other government buildings. We'll hear from the U.S. commanders in Mosul, coming up a little bit later.

The husband of aid worker Margaret Hassan is begging to learn the truth about his wife's fate. The Arab network al-Jazeera says, if obtained, a video, showing the apparent shooting of a woman identified as Hassan. The video was not aired. The 59-year-old Hassan, head of the Iraqi operations of CARE International, she was abducted on October 19th.

Here In the United States, House Republicans are meeting today in an attempt to protect Tom DeLay's position as majority leader. It's seen as a preemptive move if Delay gets indicted in a campaign finance probe. In about two hours, a House committee votes to change a requirement that forces leaders to give up their posts if they've been charged with a felony.

And this one for the records books at NASA. The so-called scramjet aircraft zipped through the air yesterday at almost 10 times the speed sound. NASA still looking at the data, but agency says the aircraft reached about 6,600 miles per hour. Nobody's going to be riding in that aircraft, however. That's few too many g's.

COLLINS: All right, thanks, Heidi. Let's get right to breaking news in the world of business this morning. It involves retail giant Sears and K-Mart, a little marriage there. Andy Serwer with the breaking story.

Good morning to you.

ANDY SERWER, "FORTUNE" MAGAZINE: Good morning. Two American icons, Sears and K-mart, are merging in an $11 billion dollar deal.

Some people may be surprised by this Soledad, but actually they shouldn't, because both companies have been eclipsed in recent years, not only by Wal-Mart, but also by Target as well. K-mart, you may remember, recently emerged from bankruptcy. The deal was orchestrated by Wall Street financier Eddie Lampert. The company will be called Sears Holdings. Both store names will remain. The companies will have about 3,500 stores, about $55 billion in revenue. Just to give you a point of reference, Wal-Mart has 4,800 stores and $250 billion in revenues. This new company will be the third largest retailer after Wal-Mart and Target.

O'BRIEN: Who bought whom in this deal.

SERWER: Well, when you come right down to it, K-mart actually bought Sears. The Sears shareholders get what's known as a premium. So K-mart buys Sears is the headline.

O'BRIEN: And do you think Wall Street is going to like this deal?

SERWER: I think they are, but both companies are struggling, so it's not like this is going to be some sort of new colossus.

O'BRIEN: All right, Andy we're going to check in with you throughout the morning on this as we get more information.

Thank you very much -- Mr. Hemmer.

HEMMER: All right, Soledad.

In the past week, President Bush's cabinet has been shuffling like a deck of cards. So far, six of 15 secretaries have stepped down. Others are expected to follow suit.

Now follow along now: last Tuesday, the White House announced the resignations of Attorney General John Ashcroft and Commerce Secretary Don Evans. Now the next day, White House counsel Alberto Gonzalez was nominated to replace Ashcroft. On Monday, four more resignations announced, including the big one, Secretary of State Colin Powell, Agriculture Secretary Ann Venneman, Education Secretary Rod Paige, and Education Secretary Spencer Abraham. Then, Condoleezza Rice was nominated yesterday to fill the vacancy at State, and a senior administration official telling CNN that the president intends to name his longtime domestic policy adviser Margaret Spellings as education secretary.

Senior administration sources tell CNN that homeland security Tom Ridge plans to leave his post, but that has not been officially confirmed.

Let's turn to Jeff Greenfield to put all this in perspective now.

Good morning to you, Jeff.

There is a lot of speculation about what all of this means about Rice going to the Department of State. You say some of it might be semi-informed and some of it may be taken away with a bit of grain of salt, huh?

JEFF GREENFIELD, CNN SR. ANALYST: Yes, well, with all these cabinet changes, most of which are really unimportant, since the White House runs most of these policies, but state is worth looking at, because the switch is being played as a victory for the so-called hard liners. These are allies for Vice President Cheney and Defense Secretary Rumsfeld, and the so-called neoconservatives, who have a rather sweeping, ambitious vision of what America accomplished, often on its own or leading the world, transforming the Middle East for example. We say that Colin Powell and the State Department was essentially and adversary to this vision, too cautious, too accommodating.

"The Wall Street Journal" editorial page, which reflects this harder-line view, said yesterday, maybe now we'll have a State Department that supports the president.

And this view of what happened gets some support from what's going on at the Central Intelligence Agency apparently, where the new director Porter Goss appears out to clean house. That's triggered resignations from a trio of top officials. And there's a view reflected by Senator John McCain, who said the CIA, he called it a rogue agency, actually worked to undermine the president's reelection by leaking damaging information about Iraq and weapons of mass destruction.

So you put these two things together, Bill, the State Department change, the CIA, and it represents an attempt to grapple with the two institutions, the State Department and the CIA that were strongest opposition within the government to the basic foreign policy premise of the Bush administration. And that's why the fact that Powell who had said, well, maybe I'll stay on for a while, apparently said, maybe I'll now leave. You combine that with what's going on at the CIA, and it's being read as a hardliners triumph.

HEMMER: So then why a grain of salt in all this?

GREENFIELD: Well, actually, I think it's because history suggests presidents often end up in a very different place from where there supporters and critics thought they'd be on foreign policy.

I mean, look at Ronald Reagan, a hardline anti-communist with Gorbachev, Reagan wound up proposing the complete elimination of nuclear weapons at Racovic (ph), and wound up making, you know, a series of deals wit Gorbachev.

Richard Nixon, even a better example, Mr. anti-communist, who opened the door to mainland communist China. The other reason is, suppose Bush wants to approach a tougher approach to the world. Does he have the troops to do it? I mean, how do you impose regime change on Iran and North Korea, the two remaining members of the "axis of evil." The U.S. certainly doesn't have convention forces to do it. Are we really talking about nuclear weapons? What price would America and a country like South Korea pay for any kind of military? So we could be looking, fours back from now, looking back on this, and find the president in a totally different place from where all this speculation thought he'd be.

HEMMER: So we need to save this tape and come back in four years from new and revisit in 2008. The thing that sticks out in my mind, when President Bush met reporters in Washington after he won the election, he essentially said, at some point, I'm going to be a lame duck president. I have a finite period of time to get things done in D.C.

GREENFIELD: I have political capital and I plan to spend it.

HEMMER: That's right, and he seemed to say that I have about 24 months to do this. Is this part of all that?

GREENFIELD: It certainly suggests he's moving very quickly to consolidate his power. There's nobody closer to the president than Condoleezza Rice was. And the whole idea of a clash within the administration with Colin Powell, his deputy, Richard Armitage, representing a different worldview really seems to be moving, that seems to be the place.

HEMMER: Thank you, Jeff.

GREENFIELD: OK.

HEMMER: We'll be watching, Jeff Greenfield here -- Soledad.

(WEATHER REPORT)

O'BRIEN: Well, they call this a monument to decadence. Take a look at this, yesterday, Hardy's restaurants unveiled a hamburger to end all hamburgers, the so-called Monster Thick Burger. Mmm, that sounds healthy. The 100-percent Angus beef burger weighs in at two thirds of a pound. It is topped with four strips of bacon, three slices of American cheese, a little mayo on there as well, all on the buttered, toasted sesame seed bun. Weight watchers probably don't want to have this, because the Monster Thick Burger has a whopping 1,420 calories, 107 grams of fat. Yes, that looks healthy. Smells good, doesn't it.

HEMMER: You feel it for four days.

O'BRIEN: You don't have to eat for the whole week.

HEMMER: It's not going anywhere -- it's still in there.

O'BRIEN: But it looks good.

HEMMER: Yes.

In a moment here, another TV network finding sex and football a volatile mix. We'll look at the new NFL controversy involving "Desperate Housewives." We'll get to that.

O'BRIEN: Also ahead, Liza and the law. What do court papers say about Liza Minnelli, her ex-bodyguard, her estranged husband. A look at that.

HEMMER: And the Clinton presidential library does not open until tomorrow. We've already got a sneak peek inside, though, including a look at the president's low point in a moment. We'll get to that after this, on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: ABC is apologizing for its steamy opening to this week's Monday Night Football game after complaints from viewers and the league. The segment spoofed the network's hit series "Desperate Housewives," featuring a sexually suggestive locker room meeting between actress Nicolette Sheridan and the Eagles' Terrell Owens.

(BEGIN VIDEO CLIP)

NICOLETTE SHERIDAN, ACTRESS: Terrell, wait.

TERRELL OWENS, PROFESSIONAL FOOTBALL PLAYER: Aw, hell. The team's going to have to win this one without me.

SHERIDAN: Whoa!

UNIDENTIFIED ACTRESS: Oh, my god. Who watches this trash? Sex, lies, betrayal?

(END VIDEO CLIP)

O'BRIEN: ABC said yesterday we've heard from many of our viewers about last night's Monday Night Football opening segment. We agree the placement was inappropriate. We apologize. "Vanity Fair's" Michael Wolff is here to tell us if it's another wardrobe malfunction or just synergy run amuck. And the synergy being of course that this both ABC ventures here.

MICHAEL WOLFF, "VANITY FAIR" MEDIA COLUMNIST: No, I think it's important to point out this is money in the bank for everybody involved -- for ABC, for "Desperate Housewives" and for the NFL.

O'BRIEN: So you're saying then, two things. One, the apology is not really heartfelt. And two, that all this controversy was really planned?

WOLFF: You know, I'm not sure how much it was planned, but is it being taking advantage of? Is somebody rubbing their hands together? Yes.

O'BRIEN: The NFL put out a statement that said, the NFL and the fans lost. This was taped in the locker room, and that's an NFL player. Again, is this a....

WOLFF: Completely. It's a world, an industry of phoney- baloneys, no question.

I mean, really, what we have here, is we have this conflict of two forces. We have the forces at network television that have to leverage. If you have a hit, you have to leverage it. That's the business that we're in. We wouldn't be sitting here if that didn't happen. But that now meets this other new force in the country, which is this enormous conservatism and anger at the media.

O'BRIEN: Is this conservatism you think that's speaking or is the angry -- really? A new day when it comes to what people want to see on TV?

WOLFF: Yes, this is part and parcel of the liberal media, yes.

O'BRIEN: They could face fines, if they violated broadcast standards, ABC could be fined. Do you think that that clip...

WOLFF: I think it's unlikely. I mean, I think that's the background to this. It is unlikely they could face a fine in this clip, which is, I think it's important to point this out, something you can see on television, certainly every primetime hour, if not every primetime minute.

O'BRIEN: And you've to mention the cheerleaders of these teams are wearing just barely more than Nicolette Sheridan is wearing in that.

WOLFF: Hello, yes.

O'BRIEN: You probably get to see a whole lot more than you do there. Do you think this is something that's going to go away, or are we in a new age and we're going to see more of this, in fact?

WOLFF: I think we're in a new age of, well, hypocrisy, for one, but in a new age of real anger, I think, at the fact that the media is engaged in this kind of hypocrisy.

O'BRIEN: Do you think at the end of the day this helps the NFL, because "Desperate Housewives" is doing pretty darn well.

WOLFF: I think at the end of the day, and this is the point, the point of all of this, it helps the NFL.

O'BRIEN: We will see. Michael Wolff, nice to see you, as always.

WOLFF: Thank you.

O'BRIEN: Thanks -- Bill.

HEMMER: The latest twist in Liza Minnelli's legal troubles continuing. She is countersuing her former bodyguard. He's asking her for $100 million, accusing Minnelli of harassment, and forcing him to have sex with her. She says the bodyguard is connected with her estranged husband, who charges that the actress beat him up. She is countersuing him as well. Update the scorecard.

In a moment, Andy's "Minding Your Business." More on that megamerger between two onetime giants of the retail industry. We'll get to that and more right after this on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Welcome back, everybody. Much more on the breaking news, word that retailers Sears and K-mart are joining forces, and a preview of the markets after a bit of a down day yesterday. Back to Andy, "Minding Your Business." There is an under-story in all of this, and this really the Wal-mart effect.

SERWER: There really is, Bill. I mean, their story reflects the history of retailing in this country over the past several decades. Of course we're talking about Wal-mart and we're talking about K-mart, and we're talking about Sears. Sears and K-mart are merging this morning, by the way. K-mart is buying Sears, an $11 billion deal. Both stores will retain their names, but they're going to combine, a company called Sears Holdings. It's going to be based where Sears is based.

But you go back to 1972, sort of the golden year in retailing, when K-mart, Wal-mart and Target were all founded that same year. And if you look a stock chart going back, Wal-mart since that time, versus Sears. Sears stock has not moved in those 30-plus years. Wal-Mart is up 100,000 percent. The man behind this deal, by the way, is a guy named Eddie Lampert, who controlled 50 percent of K-mart, took it out of bankruptcy, very interesting guy. He also owned 14 percent of sears.

So not really a surprise there. He's going to be chairman of the new company. We'll be learning more about this guy. He is someone that we should all probably get to know.

Let's talk a little bit about the markets yesterday. As you mentioned a down day. Those inflation numbers that we talked about yesterday in October kind of spooked the markets. You can see the Dow falling, the Nasdaq falling and the S&P falling. A lot to digest this morning with this merger out there and also Hewlett Packard has some earnings. We'll talk about that later.

HEMMER: Good deal. A lot of this is fight for survival, too, with K-mart and Sears.

SERWER: Exactly, yes, trying to compete against Wal-mart and Target.

HEMMER: Thank you, Andy.

O'BRIEN: What's the Question of the Day?

CAFFERTY: The Question of the Day is about that footage, Soledad, that NBC taped we saw yesterday of a Marine in Falluja. It was shown out of context. This is a Marine who went into that mosque two days after he was shot in the fact by insurgents, one day after a firefight in the same building in which American forces killed 10, wounded five, and a few days before that, this Marine's friend had been killed by a bobby-trapped body. Commanders defended this Marine, saying the tactics used by the insurgents violate the rules of engagement -- they bobby-trap corpses; they feign surrender; they hide behind civilians.

This is the part that knocks me out. The Pentagon says it's concerned how this tape will play in the Arab world. The Arab world is where innocent people are kidnapped, blindfolded, tied up, tortured and beheaded, and then videotape of all of that is released to the world as though they're somehow proud of their barbarism. Somehow, I wouldn't be too concerned about the sensitivity of the Arab world. They don't seem to have very much.

Here's the question, should TV cameras follow combat troops during war? AM@cnn.com. We'll read some letters later.

HEMMER: It's a good topic, and one to reflect on with the first invasion of March a year and half ago. With the embedded process, reporters going in there, with the Marines and the U.S. Army, it's like looking at that battlefield through a soda straw. But without those reporters there, we don't see what's happening on the other side.

O'BRIEN: But it's also hard to get in context, I think, in that moment of battle. It's impossible, certainly for the journalists who are there, to provide any kind of context outside what they're seeing because their job is to report what they're seeing.

HEMMER: Yes, I thought what Jack was saying about happened around that incident is very telling. I mean, you really need to know that sort of stuff.

CAFFERTY: If dead bodies are wired with explosives designed to kill American soldiers, and you walk in and see something move in a room where the lighting isn't real great, and your friend has been killed two days later, I mean, it's a little tough to condemn this kid for pulling the trigger.

The question is whether these cameras reflect anything through filters that the soldiers are seeing. We sit here in the United States and observe this stuff through a set of filters that has absolutely nothing to do with what they're experiencing. So to take these pictures and play them in the United States, I think, is extremely misleading, and serves to condemn kids who are over there with their lives on the line, trying to save this country of ours, and the hand-wringers are going, oh, did he violate the rules of engagement? They chopped a woman's head off over there yesterday. It's a going to come down to them or us. And thank God, we have these kids who are willing to do over there and do this stuff. Let's leave them alone and let them get the job done. Enough already.

O'BRIEN: All right, enough already. Let's see what the e-mail has to say, Jack. Thank you. Still to come this morning, a much lighter topic. We're serving up a little "90-Second Pop" this morning.

One of the biggest bands in rock 'n' roll history could be getting back together. Will anybody care? Plus, is Tom Hanks cracking code is his next big role? All of that is straight ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Get the latest news every morning in our e-mail. Sign up for AMERICAN MORNING quick news. CNN.com/am, there for you right now, in fact.

In a moment, Bill Clinton's library opens tomorrow. We've already seen, though, what is inside, and we will show you part of that as we continue, in a moment here on AMERICAN MORNING.

(COMMERCIAL BREAK)

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Aired November 17, 2004 - 07:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: Breaking news just in the last hour. A giant merger between two of the biggest and oldest names in retail.
Taking the Iraqi city of Mosul back from insurgents this morning, we speak live to the U.S. commander there.

And the sports classic, Monday Night Football, colliding with the sultry housewives and America's hottest new show.

Are you ready for some controversy, on this AMERICAN MORNING.

ANNOUNCER: From the CNN broadcast center in New York, this is AMERICAN MORNING, with Bill Hemmer and Soledad O'Brien.

BILL HEMMER, CNN ANCHOR: Good morning, everybody. 7:00 in New York. Good to have you along with us today?

Good morning to you as well.

O'BRIEN: Good morning to you. Welcome back. Did you have a nice birthday?

HEMMER: Yes, I did.

O'BRIEN: Because we celebrated Friday, but the day was Sunday.

HEMMER: I had a hard time getting over the whole 40.

(CROSSTALK)

O'BRIEN: That's cruel, sorry.

HEMMER: Tell me about it.

Good morning, everyone. Much more to talk about this morning on the cabinet changes in D.C., including the headliner, Condoleezza Rice, taking over the Department of State. What does this choice say about the inner power struggles in D.C.? Jeff Greenfield has some answers in a moment.

O'BRIEN: Also this morning, ABC apologizing now for a little skit it used to introduce this week's Monday Night Football game. In the skit, Nicolette Sheridan of the hit show "Desperate Housewives" plays seductress with the Philadelphia Eagles star Terrell Owens. The towel drops there, all the controversy starts with that. We're going to talk a little bit more about all of this with media columnist from "Vanity Fair" Michael Wolff.

HEMMER: I smell a ratings rat.

O'BRIEN: You think?

HEMMER: Jack Cafferty.

JACK CAFFERTY, CNN ANCHOR: The NFL really needs to get over itself on this, OK. I mean, it's not a big deal.

O'BRIEN: Lots of hew and cry.

CAFFERTY: Yes, about nothing.

O'BRIEN: Another issue that's causing some controversy is the issue of whether or not television cameras belong on a battlefield with soldiers during wartime, prompted by the footage of that Marine shooting the insurgent inside that mosque. We'll take a look at that issue and some of the reaction to it in a couple of minutes.

HEMMER: All right, Jack, thanks.

Headlines, top of the hour. Good morning to, Heidi Collins, with us as well.

O'BRIEN: And good morning to you, guys. Nice to see you again.

Now in the news this morning, U.S. and Iraqi forces are stepping up operations in Mosul. Hundreds of troops have been searching the city for insurgents. Earlier, insurgents fired mortar rounds at a police station. Military officials say they are assessing the damage now. Violence erupted almost one week ago after a series of attacks on police stations and other government buildings. We'll hear from the U.S. commanders in Mosul, coming up a little bit later.

The husband of aid worker Margaret Hassan is begging to learn the truth about his wife's fate. The Arab network al-Jazeera says, if obtained, a video, showing the apparent shooting of a woman identified as Hassan. The video was not aired. The 59-year-old Hassan, head of the Iraqi operations of CARE International, she was abducted on October 19th.

Here In the United States, House Republicans are meeting today in an attempt to protect Tom DeLay's position as majority leader. It's seen as a preemptive move if Delay gets indicted in a campaign finance probe. In about two hours, a House committee votes to change a requirement that forces leaders to give up their posts if they've been charged with a felony.

And this one for the records books at NASA. The so-called scramjet aircraft zipped through the air yesterday at almost 10 times the speed sound. NASA still looking at the data, but agency says the aircraft reached about 6,600 miles per hour. Nobody's going to be riding in that aircraft, however. That's few too many g's.

COLLINS: All right, thanks, Heidi. Let's get right to breaking news in the world of business this morning. It involves retail giant Sears and K-Mart, a little marriage there. Andy Serwer with the breaking story.

Good morning to you.

ANDY SERWER, "FORTUNE" MAGAZINE: Good morning. Two American icons, Sears and K-mart, are merging in an $11 billion dollar deal.

Some people may be surprised by this Soledad, but actually they shouldn't, because both companies have been eclipsed in recent years, not only by Wal-Mart, but also by Target as well. K-mart, you may remember, recently emerged from bankruptcy. The deal was orchestrated by Wall Street financier Eddie Lampert. The company will be called Sears Holdings. Both store names will remain. The companies will have about 3,500 stores, about $55 billion in revenue. Just to give you a point of reference, Wal-Mart has 4,800 stores and $250 billion in revenues. This new company will be the third largest retailer after Wal-Mart and Target.

O'BRIEN: Who bought whom in this deal.

SERWER: Well, when you come right down to it, K-mart actually bought Sears. The Sears shareholders get what's known as a premium. So K-mart buys Sears is the headline.

O'BRIEN: And do you think Wall Street is going to like this deal?

SERWER: I think they are, but both companies are struggling, so it's not like this is going to be some sort of new colossus.

O'BRIEN: All right, Andy we're going to check in with you throughout the morning on this as we get more information.

Thank you very much -- Mr. Hemmer.

HEMMER: All right, Soledad.

In the past week, President Bush's cabinet has been shuffling like a deck of cards. So far, six of 15 secretaries have stepped down. Others are expected to follow suit.

Now follow along now: last Tuesday, the White House announced the resignations of Attorney General John Ashcroft and Commerce Secretary Don Evans. Now the next day, White House counsel Alberto Gonzalez was nominated to replace Ashcroft. On Monday, four more resignations announced, including the big one, Secretary of State Colin Powell, Agriculture Secretary Ann Venneman, Education Secretary Rod Paige, and Education Secretary Spencer Abraham. Then, Condoleezza Rice was nominated yesterday to fill the vacancy at State, and a senior administration official telling CNN that the president intends to name his longtime domestic policy adviser Margaret Spellings as education secretary.

Senior administration sources tell CNN that homeland security Tom Ridge plans to leave his post, but that has not been officially confirmed.

Let's turn to Jeff Greenfield to put all this in perspective now.

Good morning to you, Jeff.

There is a lot of speculation about what all of this means about Rice going to the Department of State. You say some of it might be semi-informed and some of it may be taken away with a bit of grain of salt, huh?

JEFF GREENFIELD, CNN SR. ANALYST: Yes, well, with all these cabinet changes, most of which are really unimportant, since the White House runs most of these policies, but state is worth looking at, because the switch is being played as a victory for the so-called hard liners. These are allies for Vice President Cheney and Defense Secretary Rumsfeld, and the so-called neoconservatives, who have a rather sweeping, ambitious vision of what America accomplished, often on its own or leading the world, transforming the Middle East for example. We say that Colin Powell and the State Department was essentially and adversary to this vision, too cautious, too accommodating.

"The Wall Street Journal" editorial page, which reflects this harder-line view, said yesterday, maybe now we'll have a State Department that supports the president.

And this view of what happened gets some support from what's going on at the Central Intelligence Agency apparently, where the new director Porter Goss appears out to clean house. That's triggered resignations from a trio of top officials. And there's a view reflected by Senator John McCain, who said the CIA, he called it a rogue agency, actually worked to undermine the president's reelection by leaking damaging information about Iraq and weapons of mass destruction.

So you put these two things together, Bill, the State Department change, the CIA, and it represents an attempt to grapple with the two institutions, the State Department and the CIA that were strongest opposition within the government to the basic foreign policy premise of the Bush administration. And that's why the fact that Powell who had said, well, maybe I'll stay on for a while, apparently said, maybe I'll now leave. You combine that with what's going on at the CIA, and it's being read as a hardliners triumph.

HEMMER: So then why a grain of salt in all this?

GREENFIELD: Well, actually, I think it's because history suggests presidents often end up in a very different place from where there supporters and critics thought they'd be on foreign policy.

I mean, look at Ronald Reagan, a hardline anti-communist with Gorbachev, Reagan wound up proposing the complete elimination of nuclear weapons at Racovic (ph), and wound up making, you know, a series of deals wit Gorbachev.

Richard Nixon, even a better example, Mr. anti-communist, who opened the door to mainland communist China. The other reason is, suppose Bush wants to approach a tougher approach to the world. Does he have the troops to do it? I mean, how do you impose regime change on Iran and North Korea, the two remaining members of the "axis of evil." The U.S. certainly doesn't have convention forces to do it. Are we really talking about nuclear weapons? What price would America and a country like South Korea pay for any kind of military? So we could be looking, fours back from now, looking back on this, and find the president in a totally different place from where all this speculation thought he'd be.

HEMMER: So we need to save this tape and come back in four years from new and revisit in 2008. The thing that sticks out in my mind, when President Bush met reporters in Washington after he won the election, he essentially said, at some point, I'm going to be a lame duck president. I have a finite period of time to get things done in D.C.

GREENFIELD: I have political capital and I plan to spend it.

HEMMER: That's right, and he seemed to say that I have about 24 months to do this. Is this part of all that?

GREENFIELD: It certainly suggests he's moving very quickly to consolidate his power. There's nobody closer to the president than Condoleezza Rice was. And the whole idea of a clash within the administration with Colin Powell, his deputy, Richard Armitage, representing a different worldview really seems to be moving, that seems to be the place.

HEMMER: Thank you, Jeff.

GREENFIELD: OK.

HEMMER: We'll be watching, Jeff Greenfield here -- Soledad.

(WEATHER REPORT)

O'BRIEN: Well, they call this a monument to decadence. Take a look at this, yesterday, Hardy's restaurants unveiled a hamburger to end all hamburgers, the so-called Monster Thick Burger. Mmm, that sounds healthy. The 100-percent Angus beef burger weighs in at two thirds of a pound. It is topped with four strips of bacon, three slices of American cheese, a little mayo on there as well, all on the buttered, toasted sesame seed bun. Weight watchers probably don't want to have this, because the Monster Thick Burger has a whopping 1,420 calories, 107 grams of fat. Yes, that looks healthy. Smells good, doesn't it.

HEMMER: You feel it for four days.

O'BRIEN: You don't have to eat for the whole week.

HEMMER: It's not going anywhere -- it's still in there.

O'BRIEN: But it looks good.

HEMMER: Yes.

In a moment here, another TV network finding sex and football a volatile mix. We'll look at the new NFL controversy involving "Desperate Housewives." We'll get to that.

O'BRIEN: Also ahead, Liza and the law. What do court papers say about Liza Minnelli, her ex-bodyguard, her estranged husband. A look at that.

HEMMER: And the Clinton presidential library does not open until tomorrow. We've already got a sneak peek inside, though, including a look at the president's low point in a moment. We'll get to that after this, on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: ABC is apologizing for its steamy opening to this week's Monday Night Football game after complaints from viewers and the league. The segment spoofed the network's hit series "Desperate Housewives," featuring a sexually suggestive locker room meeting between actress Nicolette Sheridan and the Eagles' Terrell Owens.

(BEGIN VIDEO CLIP)

NICOLETTE SHERIDAN, ACTRESS: Terrell, wait.

TERRELL OWENS, PROFESSIONAL FOOTBALL PLAYER: Aw, hell. The team's going to have to win this one without me.

SHERIDAN: Whoa!

UNIDENTIFIED ACTRESS: Oh, my god. Who watches this trash? Sex, lies, betrayal?

(END VIDEO CLIP)

O'BRIEN: ABC said yesterday we've heard from many of our viewers about last night's Monday Night Football opening segment. We agree the placement was inappropriate. We apologize. "Vanity Fair's" Michael Wolff is here to tell us if it's another wardrobe malfunction or just synergy run amuck. And the synergy being of course that this both ABC ventures here.

MICHAEL WOLFF, "VANITY FAIR" MEDIA COLUMNIST: No, I think it's important to point out this is money in the bank for everybody involved -- for ABC, for "Desperate Housewives" and for the NFL.

O'BRIEN: So you're saying then, two things. One, the apology is not really heartfelt. And two, that all this controversy was really planned?

WOLFF: You know, I'm not sure how much it was planned, but is it being taking advantage of? Is somebody rubbing their hands together? Yes.

O'BRIEN: The NFL put out a statement that said, the NFL and the fans lost. This was taped in the locker room, and that's an NFL player. Again, is this a....

WOLFF: Completely. It's a world, an industry of phoney- baloneys, no question.

I mean, really, what we have here, is we have this conflict of two forces. We have the forces at network television that have to leverage. If you have a hit, you have to leverage it. That's the business that we're in. We wouldn't be sitting here if that didn't happen. But that now meets this other new force in the country, which is this enormous conservatism and anger at the media.

O'BRIEN: Is this conservatism you think that's speaking or is the angry -- really? A new day when it comes to what people want to see on TV?

WOLFF: Yes, this is part and parcel of the liberal media, yes.

O'BRIEN: They could face fines, if they violated broadcast standards, ABC could be fined. Do you think that that clip...

WOLFF: I think it's unlikely. I mean, I think that's the background to this. It is unlikely they could face a fine in this clip, which is, I think it's important to point this out, something you can see on television, certainly every primetime hour, if not every primetime minute.

O'BRIEN: And you've to mention the cheerleaders of these teams are wearing just barely more than Nicolette Sheridan is wearing in that.

WOLFF: Hello, yes.

O'BRIEN: You probably get to see a whole lot more than you do there. Do you think this is something that's going to go away, or are we in a new age and we're going to see more of this, in fact?

WOLFF: I think we're in a new age of, well, hypocrisy, for one, but in a new age of real anger, I think, at the fact that the media is engaged in this kind of hypocrisy.

O'BRIEN: Do you think at the end of the day this helps the NFL, because "Desperate Housewives" is doing pretty darn well.

WOLFF: I think at the end of the day, and this is the point, the point of all of this, it helps the NFL.

O'BRIEN: We will see. Michael Wolff, nice to see you, as always.

WOLFF: Thank you.

O'BRIEN: Thanks -- Bill.

HEMMER: The latest twist in Liza Minnelli's legal troubles continuing. She is countersuing her former bodyguard. He's asking her for $100 million, accusing Minnelli of harassment, and forcing him to have sex with her. She says the bodyguard is connected with her estranged husband, who charges that the actress beat him up. She is countersuing him as well. Update the scorecard.

In a moment, Andy's "Minding Your Business." More on that megamerger between two onetime giants of the retail industry. We'll get to that and more right after this on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Welcome back, everybody. Much more on the breaking news, word that retailers Sears and K-mart are joining forces, and a preview of the markets after a bit of a down day yesterday. Back to Andy, "Minding Your Business." There is an under-story in all of this, and this really the Wal-mart effect.

SERWER: There really is, Bill. I mean, their story reflects the history of retailing in this country over the past several decades. Of course we're talking about Wal-mart and we're talking about K-mart, and we're talking about Sears. Sears and K-mart are merging this morning, by the way. K-mart is buying Sears, an $11 billion deal. Both stores will retain their names, but they're going to combine, a company called Sears Holdings. It's going to be based where Sears is based.

But you go back to 1972, sort of the golden year in retailing, when K-mart, Wal-mart and Target were all founded that same year. And if you look a stock chart going back, Wal-mart since that time, versus Sears. Sears stock has not moved in those 30-plus years. Wal-Mart is up 100,000 percent. The man behind this deal, by the way, is a guy named Eddie Lampert, who controlled 50 percent of K-mart, took it out of bankruptcy, very interesting guy. He also owned 14 percent of sears.

So not really a surprise there. He's going to be chairman of the new company. We'll be learning more about this guy. He is someone that we should all probably get to know.

Let's talk a little bit about the markets yesterday. As you mentioned a down day. Those inflation numbers that we talked about yesterday in October kind of spooked the markets. You can see the Dow falling, the Nasdaq falling and the S&P falling. A lot to digest this morning with this merger out there and also Hewlett Packard has some earnings. We'll talk about that later.

HEMMER: Good deal. A lot of this is fight for survival, too, with K-mart and Sears.

SERWER: Exactly, yes, trying to compete against Wal-mart and Target.

HEMMER: Thank you, Andy.

O'BRIEN: What's the Question of the Day?

CAFFERTY: The Question of the Day is about that footage, Soledad, that NBC taped we saw yesterday of a Marine in Falluja. It was shown out of context. This is a Marine who went into that mosque two days after he was shot in the fact by insurgents, one day after a firefight in the same building in which American forces killed 10, wounded five, and a few days before that, this Marine's friend had been killed by a bobby-trapped body. Commanders defended this Marine, saying the tactics used by the insurgents violate the rules of engagement -- they bobby-trap corpses; they feign surrender; they hide behind civilians.

This is the part that knocks me out. The Pentagon says it's concerned how this tape will play in the Arab world. The Arab world is where innocent people are kidnapped, blindfolded, tied up, tortured and beheaded, and then videotape of all of that is released to the world as though they're somehow proud of their barbarism. Somehow, I wouldn't be too concerned about the sensitivity of the Arab world. They don't seem to have very much.

Here's the question, should TV cameras follow combat troops during war? AM@cnn.com. We'll read some letters later.

HEMMER: It's a good topic, and one to reflect on with the first invasion of March a year and half ago. With the embedded process, reporters going in there, with the Marines and the U.S. Army, it's like looking at that battlefield through a soda straw. But without those reporters there, we don't see what's happening on the other side.

O'BRIEN: But it's also hard to get in context, I think, in that moment of battle. It's impossible, certainly for the journalists who are there, to provide any kind of context outside what they're seeing because their job is to report what they're seeing.

HEMMER: Yes, I thought what Jack was saying about happened around that incident is very telling. I mean, you really need to know that sort of stuff.

CAFFERTY: If dead bodies are wired with explosives designed to kill American soldiers, and you walk in and see something move in a room where the lighting isn't real great, and your friend has been killed two days later, I mean, it's a little tough to condemn this kid for pulling the trigger.

The question is whether these cameras reflect anything through filters that the soldiers are seeing. We sit here in the United States and observe this stuff through a set of filters that has absolutely nothing to do with what they're experiencing. So to take these pictures and play them in the United States, I think, is extremely misleading, and serves to condemn kids who are over there with their lives on the line, trying to save this country of ours, and the hand-wringers are going, oh, did he violate the rules of engagement? They chopped a woman's head off over there yesterday. It's a going to come down to them or us. And thank God, we have these kids who are willing to do over there and do this stuff. Let's leave them alone and let them get the job done. Enough already.

O'BRIEN: All right, enough already. Let's see what the e-mail has to say, Jack. Thank you. Still to come this morning, a much lighter topic. We're serving up a little "90-Second Pop" this morning.

One of the biggest bands in rock 'n' roll history could be getting back together. Will anybody care? Plus, is Tom Hanks cracking code is his next big role? All of that is straight ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Get the latest news every morning in our e-mail. Sign up for AMERICAN MORNING quick news. CNN.com/am, there for you right now, in fact.

In a moment, Bill Clinton's library opens tomorrow. We've already seen, though, what is inside, and we will show you part of that as we continue, in a moment here on AMERICAN MORNING.

(COMMERCIAL BREAK)

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