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Carefully Watching Wall Street; Conflicting Reports About Ramadi Incident; Vaccination Required?

Aired February 28, 2007 - 10:59   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

TONY HARRIS, CNN ANCHOR: And good morning, everyone. You're with CNN. You're informed.
I'm Tony Harris.

HEIDI COLLINS, CNN ANCHOR: And I'm Heidi Collins.

Developments keep coming in to the NEWSROOM on this Wednesday, the last day of February.

Here's what's on the rundown.

Blue chips on sale. Bargain hunters picking up deals on stocks after Tuesday's jaw-dropping losses.

Talking live this hour with a motley fool.

HARRIS: Know your enemies. The Bush administration agrees to sit down with Iran and Syria to discuss Iraq. We will talk with an expert on Iran live.

COLLINS: The vaccine guards against a sexually transmitted disease. Texas moves to make it mandatory for preteen girls. The shot heard in classrooms and courtrooms in the NEWSROOM.

For whom the bell tolls. So, is it a good sound or a bad sound? Well, we're about 90 minutes into a new day on Wall Street.

Will U.S. stock markets recover from their bout of Asian flu yesterday? China's market sneezed, U.S. investors shivered, and Wall Street shuddered. Just minutes ago, the nation's top economists appeared on Capitol Hill and downplayed the aftereffects.

(BEGIN VIDEO CLIP)

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: I will say that the Federal Reserve, in collaboration with the president's working group, has been closely monitoring the markets. They seem to be working well and normally.

(END VIDEO CLIP)

COLLINS: Here now, a recap of the plunge.

The Dow Jones Industrial Average dropped 416 points, the Nasdaq tumbled almost 97 points. But those numbers don't tell the whole story, of course. They never do.

The Dow lost about 3.3 percent of its total value yesterday. Compare that to Black Monday in 1987. You'll remember a 500-point drop then cost the Dow more than 22 percent of its value.

Let's get a look at how the markets are doing right now. Wow. Trading has been under way for about an hour and a half.

Our Susan Lisovicz is watching those numbers, joining us now live from the New York Stock Exchange.

104 there, Susan.

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Yes, Heidi. I mean, it got a case of whiplash here.

COLLINS: No kidding.

LISOVICZ: We had triple-digit losses and now triple-digit gains.

And somebody who can put it in perspective for us is really the dean of the traders at the New York Stock Exchange, Art Cashin.

How long have you been here?

ART CASHIN, UBS SECURITIES: I first became a member in 1964, but I came in swaddling clothes. I was only a small baby.

LISOVICZ: OK. You were just a baby.

So what's going on right now? Why this big rally?

CASHIN: Well, it's a bit of a rebound. China markets rallied back. It looks like less of a threat.

The early rally attempt faltered here. Bernanke came out and said that the markets were working well, and they found that reassuring, although I must tell you, that's part of the job description under Federal Reserve chairman, must be reassuring, right.

LISOVICZ: So, is this a one-day wonder, what happened yesterday, or are we in a whole new era now?

CASHIN: We're going to find out. We're going to have to watch over the next several days. It's too early to call an all-clear. As I sometimes like to indelicately say, often it's the second mouse who gets the cheese. It's not best to jump at the first opportunity.

LISOVICZ: So what should investors do then, Art?

CASHIN: I think you do watchful waiting. It will be less about economics and more about the markets themselves.

What happened yesterday and had actually begun a little bit earlier on Monday, is markets started to go down, hedge funds and others looked to raise cash. There's an old saying in Wall Street, when you can't sell what you want to sell, you sell whatever you can. Sometimes it's grandma's necklace. Sometimes it's stocks in New York.

So, that's what happened yesterday. We'll watch over the next five days. If selling resumes, then that liquidity pinch is still there. If not, then we're back to the old games.

LISOVICZ: You've seen some of the big, big drops, though, and this is, relatively speaking, not as bad?

CASHIN: Nowhere near.

LISOVICZ: OK.

Art Cashin putting it in perspective for us.

And the market right now, the Dow Jones Industrials, triple digits higher.

Back to you, Heidi.

COLLINS: Wow, Susan. Yes, it's so important to watch what these numbers do today, obviously. And I think he hit the nail on the head, don't you, about Ben Bernanke?

Of course, part of the job description to reassure investors. But maybe it's a little bit about, you know, remembering that when you see something like this happen, just take caution. Don't be throwing all your money out there on a day like this that could be still volatile.

LISOVICZ: That's right. And I think that's what Art was saying, watchful waiting.

COLLINS: Watchful waiting. We know you're doing it for us.

Thanks, you guys.

LISOVICZ: You're welcome.

COLLINS: Susan, we'll check in later.

HARRIS: A new day, new bloodshed in Iraq. A car bomb exploded near a Baghdad market, killing at least 10 people. More than 20 others were wounded.

Elsewhere in Baghdad, two people were killed in a suicide car bombing outside of a police station.

South of Baghdad, in the town of Mahmoudiya, reports that at least one person was killed, three others wounded after roadside bombs exploded. And the military says coalition forces killed eight suspected terrorists and detained six others. It happened during raids in and around the Baghdad area. The military says troops were targeting al Qaeda in Iraq and other insurgents.

COLLINS: Improving all the time. That's how a spokesman described the condition of Iraqi president Jalal Talabani. He's been hospitalized in Jordan since Sunday.

There are conflicting reports about the seriousness of his condition. Talabani's son says his father suffered dizziness and low blood pressure. The president's private doctor says the Iraqi leader is suffering from exhaustion and lung inflammation.

He is undergoing tests. It's described as a precautionary measure. No word on when the Iraqi president might be released.

HARRIS: Conflicting accounts on a reported deadly incident in Ramadi. At issue, what exactly happened, and when? And were any children killed?

CNN's Jennifer Eccleston is in Baghdad.

Jennifer, good to see you.

What have you been able to piece together about the events in Ramadi?

JENNIFER ECCLESTON, CNN CORRESPONDENT: Tony, the picture is becoming slightly clearer. We have now two senior officials, one in the health and one in the defense ministries here in Baghdad, tell CNN that yesterday's alleged car bombing in Ramadi that reportedly killed 18 people, most of them children, is, in fact, false.

They, as well as a senior official in Ramadi, say the incident was confused with a bombing that actually happened on Monday in Ramadi, where Iraqi officials reported that 18 people, including women and children, died. U.S. estimates, however, say the number of dead was 15 during Monday's bombing.

Now, the reversal is consistent with American reports that there were no car bombs that took place in the rest of the capital -- of Anbar province on Tuesday.

(BEGIN VIDEO CLIP)

REAR ADM. MARK I. FOX, COALITION SPOKESMAN: The allegation was false. And so, obviously somebody was stirring -- I can only speculate as to what was going on there, but there was only one -- one explosion. There were no children killed, and it was a controlled explosion.

(END VIDEO CLIP)

ECCLESTON: Yes, as he said there, they did confirm that there was a controlled explosion by U.S. forces Tuesday evening. It took place across the street from a makeshift playing field. It was a bigger blast than they had expected, and, as a result, 30 people were wounded, including children.

Still, the Ministry of Interior here in Baghdad is standing firm. They maintain that that car bomb allegedly taking place on Tuesday did, in fact, happen. And last night, the attack was condemned by Iraq's president, Jabal Talabani, who is in Amman, and Prime Minister Nuri al-Maliki, who called it a terrorist strike against Iraqi children -- Iraq's children, rather. Now, so far, these statements have not been retracted, so it's still a bit confusing -- Tony.

HARRIS: Yes. Yes, it sounds like it. And maybe that's the place to go with this.

Why is it so difficult to sort out? I mean, what's happening in a place like Ramadi?

ECCLESTON: I think there are two fronts here.

From a journalistic point of view, it is very difficult, if not possible -- and I would say -- I would lean toward the impossible -- of getting contacts, getting stringers, getting fixers locally to actually report from there. It is a very dangerous area.

There is a tussle going on in Ramadi between local tribes and the insurgents, many of them linked to al Qaeda. As a result, it is impossibly dangerous to do work from there.

It is also debilitated by the fact that they don't have any, any ability to talk to people. Those that do and are able to get out, they operate through tharia (ph) phones, which that are expensive and not everybody has them. But there is no cell phone coverage like here in Baghdad and across most of the country, and no landlines.

So, not only is it impossible for us to do our job in getting information from people on the ground, but it's also very difficult for the officials in Ramadi, the Iraqi police, to actually communicate with their higher-ups here in Baghdad. And once the rumors start, it tends to -- it tends to snowball with little ability in the early hours to actually get to the nut, to get to the truth -- Tony.

HARRIS: Boy, that was a little bit costly here as some information got out that is now firmly being refuted by the U.S. military.

Jennifer Eccleston for us in Baghdad.

Jennifer, great to see you. Thank you.

COLLINS: A note from the jury prompts a hearing. Now a note back from the judge seeks clarification. It's happening now in the perjury trial of former vice presidential aide Scooter Libby.

The jury note was submitted yesterday at the end of the fourth full day of deliberations. The judge sent a return note this morning. He says he is not clear on what the jury is trying to ask him.

Libby is accused of lying to investigators, probing a CIA leak. He faces up to 30 years in prison if found guilty, but the term would likely be much shorter under federal sentencing guidelines. HARRIS: It's a wrap. The Florida appeals court hearing on the burial of Anna Nicole Smith ended a short time ago. No ruling announced. But the attorney for the court-appointed guardian of Smith's baby told the court burial is set for Friday, 10:30 a.m., in the Bahamas.

Smith's mother, Virgie Arthur, filed the appeal to block the Bahamas burial. She wants to bury her daughter in Texas.

COLLINS: Only fools rush in, but isn't the day after a selloff a fine time to pick up bargain stocks? I don't know. So we're going to get some advice from a motley fool, live in the NEWSROOM.

HARRIS: Iran, a key player in the Middle East, its growing influence a major worry for its neighbors and for the United States. We will hear from an expert in the NEWSROOM.

COLLINS: The fight over the HPV vaccine. Should it be mandatory for preteen girls?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's our decision as a family. It's not the state's decision to immunize my daughter.

(END VIDEO CLIP)

COLLINS: Some people say no. We'll take a closer look at the debate in Texas straight ahead in the NEWSROOM.

HARRIS: And look out. She is a lady with a lead foot. The woman turns an office into a drive-through. Wait until you hear whose office.

(COMMERCIAL BREAK)

HARRIS: You know, you can hear it loud and clear in Texas, a public debate erupting over a usually private matter. At issue, a mandatory vaccination against a sexually transmitted virus.

CNN's Alina Cho reports.

(BEGIN VIDEOTAPE)

MORGAN WAGGONER, FOURTH GRADER: Bye, mom.

PAM WAGGONER, MOTHER AGAINST REQUIRED HPV VACCINES: Bye, Morgan. I'll see you later.

ALINA CHO, CNN CORRESPONDENT (voice over): Ten-year-old Morgan Waggoner has no idea she's at the center of a national debate over a vaccine for a virus that causes cervical cancer.

WAGGONER: It's a disease and you can get it from kissing and stuff like that. CHO: And she has no idea the disease is sexually transmitted. But she could soon be required to be vaccinated against the Human Papillomavirus, or HPV. Texas Governor Rick Perry signed an executive order mandating the vaccine for all girls entering the sixth grade. Morgan's parents are Republicans and voted for Perry twice, but say on this the governor is wrong.

CHRIS WAGGONER, FATHER AGAINST REQUIRED HPV VACCINES: It's our decision as a family. It's not the state's decision to immunize my daughter.

CHO: The Texas Eagles Forum, a bipartisan group, is leading the charge against the vaccine, saying it contradicts the state's abstinence only sex education policies and questioning the drug's high cost. And last week, the parents of five Texas school girls filed a lawsuit against the governor, saying the school-aged girls of Texas are not guinea pigs. Morgan's mother believes the HPV vaccine, though FDA approved, has not been tested enough to be considered safe.

P. WAGGONER: There's no need for me to vaccinate my child at 12 years of age.

CHO: The vaccine, called Gardasil, is made by pharmaceutical giant Merck. One of its lead lobbyists in Texas is Perry's former chief of staff. But Perry says this decision was based solely on public health.

GOV. RICK PETTY, (R) TEXAS: This is safe. It's been tested. And it's available.

CHO: State Representative Garnet Coleman agrees and says he wants his 11-year-old vaccinated.

GARNET COLEMAN, TEXAS STATE REPRESENTATIVE: And because it's easily transmitted, that means we can protect children or women now.

CHO: Morgan Waggoner's parents say it's too soon to talk about sexually transmitted diseases with their daughter. And she thinks so, too.

M. WAGGONER: It feels weird.

CHO (on camera): Why?

M. WAGGONER: Because it feels like I'm really young and they're talking about older stuff.

CHO: And if you're wondering why Texas is at the center of this debate, a couple of reasons. Number one, Texas is the first state in the nation to mandate the vaccine, so that's significant.

Also, 3,700 women in the U.S. die each year of cervical cancer. A 10th of those victims are in Texas. That's part of the reason why the governor says it's important to act now, while opponents of the mandate say this drug, Gardasil, was approved by the FDA eight months ago. Why the rush to mandate? They say if the governor believed this issue was that important, he should have held public hearings and let the state legislature decide what to do about this, not issue a blanket mandate.

Alina Cho, CNN, Austin, Texas.

(END VIDEOTAPE)

HARRIS: And to get your "Daily Dose" of health news online, log on to our Web site. You will find the latest medical news, a health library, and information on diet and fitness.

The address: cnn.com/health.

COLLINS: Want to go back to Chad Myers now, a little bit of a weather watch for you.

(WEATHER REPORT)

COLLINS: Fool for the money? How you can deal with yesterday's plunge on Wall Street. We get the wise council of a motley fool.

Those numbers up right now, though, 109 points. Look at that.

He's going to be talking with us coming up in the NEWSROOM.

HARRIS: Two typical looking young women. It looks like they're having fun, huh? What they're accused of doing is no laughing matter.

Details in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: A bestseller claims to have the secret to success, but critics say the book should be shelved in the fantasy section.

CNN's Randi Kaye reports.

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT (voice-over): A diamond ring, a husband, a new job -- ask, believe, and you will receive. The author of "The Secret," the latest self-help sensation, says it's that easy.

RHONDA BYRNE, AUTHOR, "THE SECRET": There is incredible power inside every single human being.

KAYE: Australian television producer Rhonda Byrne has apparently discovered how people can get whatever they want. She says it comes from ancient wisdom, unlocked from history and science. And she's sharing this secret for a price: 1.5 million DVDs sold.

UNIDENTIFIED MALE: Your wish is my command.

KAYE: A seat on Oprah's couch, the golden ticket for any author. OPRAH WINFREY, TALK SHOW HOST: So our thoughts are the most powerful thing that we have.

KAYE: And a "New York Times" bestseller. Not bad for a book Byrne wrote in less than a month.

Wondering what the secret is? It's the law of attraction. Think of yourself as a magnet. What you attract into your life is what you get. What you believe, good or bad, becomes reality.

This boy in the documentary believes he's going to get a new bicycle. He does. This woman gets a diamond necklace.

(on camera): In essence, it's the power of positive thinking, so it's best, Byrne says, to stay upbeat. Take a look at these desserts. If the secret holds true, I could eat any one of these and not gain an ounce. That's because Byrne says it's not the food that makes us fat, but thinking the food will make us fat that makes us fat. So why not dig in?

(voice-over): It's no secret that Barbara Capozzi is a believer. She's sure the secret will recharge her love life.

(on camera): Have you closed your eyes and focused and believed that the right man would come your way yet?

BARBARA CAPOZZI, FAN OF "THE SECRET": Yes, I'm working on that now, and actually, I went yesterday to buy a focus board which is where you put up photos of what you really want to come to fruition. And one of the photos I'm going to put up is a ring.

KAYE: An engagement ring?

CAPOZZI: Yes.

KAYE: Don't you think, though, that if it was this easy, if we could just focus on something or believe in something, it would come our way, that by now we would all be millionaires and maybe have a cure for cancer and who knows what else?

CAPOZZI: I don't have a doubt that it works.

KAYE (voice-over): Dr. John Norcross calls "The Secret" pseudo- scientific, psycho-spiritual babble.

DR. JOHN NORCROSS, UNIVERSITY OF SCRANTON: It's just New Age packaging of centuries-old snake oil. It promises an ancient secret, hidden powers and mysterious transformations, if only you buy this product.

BYRNE: I couldn't believe all the people who knew these...

KAYE: If Norcross is right, the real secret to "The Secret's" success may not be the power, but the packaging.

SARA NELSON, EDITOR-IN-CHIEF, "PUBLISHERS WEEKLY": The title is very smart, very smart. This appeals to something very universal in people. And I think no one ever went broke underestimating the unhappiness of the American people and their desire for self- improvement.

KAYE: Rhonda Byrne can't say when what you believe will happen will actually happen, but it's clear her secret is out and her time is now.

Randi Kaye, CNN, New York

(END VIDEOTAPE)

HARRIS: Iran, a key player in the Middle East, its growing influence a major worry for its neighbors and the United States. We will hear from an expert next in the NEWSROOM.

Proud of the pyramids, Egypt now wants the ancient marbles kept out of the debate about a new list of wonders.

That's ahead in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Heidi, I'm a little anxious here because you've been doing the Big Board updates all morning. And look. The markets -- look. Flying through the roof. Now it's my turn.

COLLINS: Are you saying -- are you saying I'm a force?

HARRIS: Yes, absolutely.

COLLINS: Yes, right.

HARRIS: And now it's my turn. OK. So, here we go.

Triple-digit losses yesterday. Triple-digit gains so far today. The Dow up 104 points. That's all I'm saying in the NEWSROOM.

COLLINS: OK, good, because, look, they stayed up. That's good.

Oh, now they're going down.

Well, as Tony said, all eyes are certainly on Wall Street on this day after the big selloff. So, what now?

For that, we turn to a well-known stock adviser. Tom Gardner is the CEO of "The Motley Fool," which dispenses its wisdom to millions of folks like us.

And, Tom, I have to read your bio quickly. One of the country's most respected and trusted sources on personal finance and investing as an educator, author, lecturer, media personality. David wears many hats.

HARRIS: There you go.

TOM GARDNER, CEO, "THE MOTLEY FOOL": The hat fits today.

COLLINS: It does. What in the heck happened?

GARDNER: Well, you know, I think it takes a fool to give us some perspective. We need to look at history at all times as investors. The biggest mistakes we make are those we make when emotion rules each of our actions, so we need to widen the lens and look at what's happened to the stock market over long periods of time. If we think back to the market crash of 2001 and the horror that we experienced during those two years, in point of fact, if you widen the lens 10 years from 1992 to 2002, you get about 10 percent annual returns from the stock market.

And we're seeing some of that volatility over the last two days -- down 200 points, up 100 points. I think for the average investor, you need to cast your eyes away from the people trying to get you to think moment by moment with stock picks that you need to buy and sell, and instead think of yourself as an owner and realize when the market falls like it did yesterday, it might be a good opportunity to buy some stock.

COLLINS: Yes, it's hard and it's tempting I think, especially for people who are kind of risky to try to remember isn't it more about the economics and not the everyday numbers.

GARDNER: Yes, it's also. At The Motley Fool, we really preach understanding businesses. So you look at a company like Starbucks, and I think we have to ask ourselves, how many of us think that what happened yesterday in Shanghai on the market is really going to dramatically affect Starbucks' business over the next 10 years? There are a lot of challenges that any company faces, but great companies are going to continue to perform, and when the market goes down, it's time to think, wow, when others are getting fearful, maybe I should be greedy. That's what Warren Buffett says and he's made about $40 billion with that philosophy.

COLLINS: Yes, the fear and greed. It's definitely at the forefront of this one I would imagine.

What about that effect, though, internationally?

GARDNER: Well, we're moving into a marketplace now, into a world in the 21st century where we're much more connected to international markets. Historically, you take the last 25 years in particular, and the U.S. has really been the bellwether market.

I think this is an early sign. I mean, I'm talking very early now. But I believe 20 years from now, China's going to be the bellwether market that we're all going to be looking to. So there's a lot of speculation in the Shanghai market, a lot of Chinese investors coming into the market for the first time and making the mistake of buying penny stocks instead of buying businesses. So that markets going to be very volatile, and the U.S. market will be affected because of it.

But I continue to think that if you're studying companies, opportunity opportunities arise out of days like yesterday.

COLLINS: Is that sort of the big headline, then, at least today as we sit here at 11:32, hours from the close of the day after the sell-off? But that maybe now, you know, China is really -- or Asia, I should say, in particular, is causing the U.S. to react, whereas before it was kind of the other way around?

GARDNER: Well, I thought, first of all, the big headline was that this is Heidi Collin's day. She's making the markets...

(LAUGHTER)

GARDNER: I thought we agreed on that.

COLLINS: Yes.

GARDNER: But secondarily, secondarily if you will, the Chinese market, yes, I mean, a lot of funds are now investing over there. People have seen their returns. One of my favorite stocks over the last two years is a company called Sea Trip, which is the number-one travel agent in China. It's been a great stock. The Chinese market has been unbelievable over the last 18 months. It's going to be a volatile market. There are a lot of eyes looking that way now. It's not the largest economy, though, so I still think the international marketplace is looking to the U.S. to see how our companies are performing, how our economy is performing, and I think our economy is doing well.

But certainly we're in a transition period over the next quarter century, where markets like China and India, just by virtue of the population and the real growth opportunities in those markets, they're going to begin to take the lead over the next quarter century. It'll be difficult for us who are chauvinist or egotistical, but I think for the rest of the investors that want to study, and learn and invest anywhere in the world, we at the Motley Fool, one of our most popular recent services is an international stock-picking service for people. The demand is there and I think it's going to continue.

COLLINS: Yes, right, well people will be probably checking that out today. I would ask you what kind of hat Ben Bernanke should be wearing today, but apparently we're out of time.

GARDNER: Something that looks like this, Heidi.

COLLINS: Something like that. All right, Tom -- sorry, David Gardener, thanks so much. Pleasure talking with you today.

GARDNER: Thanks a lot, Heidi.

COLLINS: It is Tom. You got me all screwed up with your hat.

GARDNER: Yes, I'm not my brother's keeper, but I'm happy to be confused with him.

COLLINS: Excellent. We appreciate it, Tom. Have a good day.

GARDNER: Thanks a lot.

HARRIS: And still to come, Iran, a key player in the Middle East, its growing influence a major worry for its neighbors and for the United States. We'll hear from an expert in the NEWSROOM.

COLLINS: Two typical-looking young women. Looks like they're having fun, but what they're accused of doing is no laughing matter. We'll have details on it coming up in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: The United States and two longtime foes face to face at last. If all goes as planned, diplomats from the U.S., Iran and Syria will be at the same table next month at a forum in Baghdad. The goal of the so-called "Neighbors Conference," stopping the bloodshed in Iraq. Representatives from Kuwait, Saudi Arabia, Jordan and Turkey are also expected to attend. Engaging Iran and Syria on the war in Iraq would be a major shift for the Bush administration. But a White House official insisting there's no change of heart. He says the U.S. has always been inclined to take part in an Iraqi-led conference.

HARRIS: Iran's growing influence in the Middle East sparking concern across the region. Vali Nasr, author of "The Shia Revival" is an expert on Iran and other parts of the Islamic world, and he joins us now from Berlin, Germany.

Vali, great to see you again.

HARRIS: Let me have you take on this question of Iran's growing influence. How do you see this? Sort out the perception from the actual reality here.

VALI NASR, AUTHOR, "THE SHIA REVIVAL": Well, Iran has benefited greatly from the fall of the Taliban in Afghanistan and Saddam regime in Iraq. It has found much more elbow room to grow its influence in areas that it was excluded from. And also it was -- last summer it showed itself to be a major player in the Palestinian issue and during the Lebanon War. And this has created a worry in the region that there's been a shift of power away from traditional Arab governments towards Iran, that Iran is now playing a much more important role in Arab countries like Iraq and Lebanon, and in the Palestinian issue at the cost of other Arab governments.

But this does not mean that Iran is in a position to make decision for the future of the region all by itself (INAUDIBLE).

HARRIS: That's interesting.

Were you surprised to hear that the United States is now willing to sit down with Iran, with Syria, in the context of a neighbors' summit in Iraq?

NASR: Yes, I was, in the sense that the United States so far has not wanted to talk to any of the neighbors, whether they were allies or adversaries when it came to Iraq, and it has made all the decisions on its own. And in addition, it had several opportunities to talk to Iran when Iran made an offer to talk to the United States about a year and a half ago, and then when the Iraq Study Group suggested that the U.S. should talk to Iran and Syria, so this is an important opening at a very critical time for both Iraq and U.S./Iran relations.

HARRIS: OK. Why now?

NASR: Well, partly because there is a lot at stake in Iraq. The United States has committed to a surge, but the violence in Iraq has escalated. There is now increasing understanding that in order to bring stability to Iraq you cannot be fighting Iran inside Iraq, and you need to have Iran, Saudi Arabia, Kuwait, Turkey, Syria, all around the same table, committing to the same plan.

On the other hand, also the issue of saber-rattling with Iran has created a lot of tension in the region. Many people are very worried about a potential military conflict, and therefore this is an opening to try to reduce tensions in the region and bring everybody back to the table in terms of discussing the issues that matter.

HARRIS: Vali, what is the incentive for Iran -- let's start with Iran -- to help, to be of assistance with Iraq?

NASR: Well, I don't think Iran needs to be bribed over Iraq. Iraq is a next-door country to Iran, and stability, chaos, civil war in Iraq will affect Iran directly. And from the very beginning, Iran has, in fact, more so than other neighbors, helped the current government in Baghdad, which is also an ally of the United States.

The Iranians are worried about the confrontation with the U.S. in Iraq. They want their position in Iraq to be stabilized. They don't want the Baathists to come back to power in Baghdad, but the Iranians don't want chaos. They don't want civil war. They don't want having al Qaeda next door. For all of those reasons, Iran, for reasons of its own national interests, would like to help stabilize Iraq, provided that its interests are protected.

HARRIS: Well, I have to ask you, if they don't want chaos next door, how do you explain the administration's claims of interference by Iran in the internal affairs with the Iraqi government in that country?

NASR: Well, not all of Iran's interference in Iraq has been government led. There is a lot of interference or activity at the popular level in Iraq between different clerics, different seminaries, different businessmen with different groups within Iraq.

Also, Iran has a lot of formal government-to-government relations with Iraq. It was the first country to recognize Iraq. It has signed over 10 government to government deals with Iraq. It has -- the first one to open an embassy. It supported elections in Iraq. But Iran is also interfering in Iraq in order to protect its own services, both vis-a-vis the United States, as well as vis-a-vis other regional powers. And therefore, Iran's role in Iraq is both good and bad, and that's also true of all of Iraq's other neighbors. They're all interfering in Iraq in a negative way, as well as having interfered in Iraq for the positive way. And in fact the whole benefit of bringing everybody around the same table is to get everybody on the same page so people -- Iraq's neighbors will not be following their own agendas divorced of any kind of a coordinated plan that would help the stabilization of Iraq.

HARRIS: Vali Nasr, author of the book "Shia Revival." A great read. We highly recommend. Vali, great to see you again. Thanks for your time.

COLLINS: Want to give you the latest on the Lewis Scooter Libby trial. There's been quite a bit of activity going on with this with the U.S. district Judge Reggie Walton. He received a note from the jury yesterday, didn't quite understand what they were trying to ask him. And now today holding hearings and trying to clear up the matter.

We have our Brian Todd there with more information there as to what happened. Do we know, Brian, what the question was and what is happening at this point?

BRIAN TODD, CNN CORRESPONDENT: We do know, Heidi, what the question was now, and it did provide a little levity in the court, a little back and forth between the judge and the jurors. The jurors never actually came into the courtroom, but between last night and today, as you explained, they sent question to the judge. The judge said he needed clarification. They just sent a note back to the judge moments ago, saying actually essentially we answered our own question. No clarification needed. We apologize. We're going to get back to work.

The original question we had here. It has to do with count three of the indictment against Scooter Libby. Quickly on count three, it alleges that Libby knowingly made false statements to FBI agents about a conversation that he had with former "Time" magazine reporter Matt Cooper in July of 2003. In that conversation Libby claims that he told Cooper that reporters were telling the administration, that administration critic Joe Wilson's wife worked for the CIA but that he, Libby, didn't know it was true. The prosecution contends that Libby actually did know it was true and confirmed it for Cooper unequivocally in that conversation.

Now the question for the jury was that -- here's the question. I'll read it verbatim. Quote: "Is the charge that the statement was made or about the content of the statement itself?" Essentially asking the judge, are you saying that Scooter Libby lied that the conversation even happened, or is he lying about the content of the conversation?

Then they return a note saying since he asked them to clarify that question, after further discussion, they say, "We are clear on what we have to do. No further clarification needed. Thank you. We apologize." It drew a lot of laughter in the courtroom from attorneys on both sides, and now we're back to work. So essentially it's a question that the jury seemed to be able to answer themselves.

COLLINS: Yes, but I think it's good, and it's sort of an example of how seriously these people are taking their jury duty, and making sure that they understand the exact charge before making a decision in this case. So you know, it might have been a little hiccup, might have taken a little time, but probably best to know what you're dealing with.

TODD: Right.

COLLINS: Thanks so much, Brian Todd.

TODD: Thanks, Heidi.

HARRIS: "YOUR WORLD TODAY" coming up at the top of the hour, 14 minutes from now. Hala Gorani standing by with a preview.

Hala, good morning.

HALA GORANI, CNN ANCHOR: Good morning, Tony and Heidi.

Well, the markets are stable today, especially on Wall Street, a day after a massive tumble that started in China. We're going to take you on a tour of world markets and tell you how a sell-off in Chinese stocks could affect your stock portfolio.

Also, the latest video from the border area between Chad and Darfur. Angelina Jolie, the Hollywood star, also a U.N. goodwill ambassador, there in those refugee camps to try to raise awareness there of the crisis in Darfur.

Also, we take you to Paris. Two paintings, two Picasso paintings, stolen from a Paris apartment, worth $66 million, that were in the apartment of Picasso's granddaughter. We'll have more on the brazen break-in that has left Paris police baffled. Apparently, there were people sleeping in the apartment when that break-in occurred.

HARRIS: Just an outrage.

GORANI: Well, we're going to be going live to Paris for the latest on the investigation.

HARRIS: Good.

GORANI: But so many people are asking questions about this. No apparent signs of a break-in and other things. We'll bring you all the details.

HARRIS: All right, Hala.

COLLINS: Thank you.

(COMMERCIAL BREAK)

(COMMERCIAL BREAK) COLLINS: You know how young women can be, joking around about school, boys, and other things. But these two are accused of doing something not funny at all: robbing a bank in Georgia. Cobb County police saying they casually walked into a bank inside a grocery store, handed a teller a note and walked out with an undisclosed amount of money. One officer said that all appeared to be all fun and games to them. Investigators believe they may be as young as 16. The FBI says there's no indication they're armed and dangerous, but if caught and convicted, they could face a very stiff sentence, even if it's their first offense.

HARRIS: We've been keeping a close eye on Wall Street ever since the market began to slide yesterday morning, the Dow industrials tumbled 416 points yesterday. As the world reacted to a sell-off in China's main index. Let's go to Susan Lisovicz at the New York Stock Exchange for a look at how the stocks. Let me tell you something, Susan, I hear you were great yesterday. I was hanging with the kids so I couldn't watch, but you've been super this morning. Look at you turning these phrases here: fear and greed battling, relief rally. You've been terrific.

(BUSINESS HEADLINES)

COLLINS: Look out. She's a lady with a lead foot. A woman turns an office into a drive-thru. Wait until you hear whose office. We'll tell you about it, coming up next in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: So, maybe she thought the DMV had a drive-thru, 80-year- old Teresa Smith (ph) was apparently in the wrong gear when she hit the gas. OK, she was at the DMV to retake her driving test. Let's repeat that, shall we? She was at the DMV to retake her driving test. Now Ms. Smith (ph) has more trouble, careless driving charge. Here's the great news. No one was seriously hurt.

COLLINS: Yes.

HARRIS: Can you believe that?

COLLINS: Man.

HARRIS: Kyra?

KYRA PHILLIPS, CNN ANCHOR: I remember stealing a Monte Carlo in the fifth grade, but we won't talk about that on national television.

HARRIS: You what? Wow.

PHILLIPS: Sorry, mom. Now she knows.

HARRIS: It's out there now.

PHILLIPS: All right, we can't forget yesterday. Boy, that Dow took a dive, huh?

COLLINS: Crazy, isn't it?

PHILLIPS: Taking stock. Wall Streeters hoping to see a rebound after yesterday's unexpected tumble. Be if you're worried about your portfolio and that it looks like Swiss cheese, well be sure to tune in and catch personal finance maven Suzie Orman. She's going to join us live in the NEWSROOM. She'll also be answering your questions. Tony, I know you'll be waiting on hand. You can e-mail us at CNNNEWSROOM@CNN.com. We'll try to answer all your questions.

And this, from cold cash to a hot job months ago. House Democrat William Jefferson was accused of taking bribes and stashing the cash in his freezer. Remember that? Right there alongside the frozen chicken. Well, the Justice Department is still working that case. Jefferson says he's innocent and he hasn't been charged. In the meantime, he's netted a very prestigious new post on the Homeland Security Committee. Guess who's going to bat for him? Join us for all those stories and the day's top news. See you in the NEWSROOM, 1:00 Eastern. Maybe those FEMA dollars might be in the back of his freezer. I don't know.

COLLINS: Well, if they found that to be the real case, maybe today, he's happy to hang onto his money, didn't invest it.

PHILLIPS: That's true. But he's taken a tank in the Dow.

HARRIS: There you go.

COLLINS: Kyra, thank you.

PHILLIPS: Sure.

COLLINS: And as we just said, CNN NEWSROOM does continue just one hour from now.

HARRIS: "YOUR WORLD TODAY" is next with news happening across the globe and here at home. I'm Tony Harris.

COLLINS: And I'm Heidi Collins. We'll see you tomorrow everybody.

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