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American Morning

Asian Sell-Off; Dow Triggers Worldwide Drop; Prosecutor Purge; President Bush Wraps up Latin American Tour

Aired March 14, 2007 - 08:00   ET

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

MILES O'BRIEN, CNN ANCHOR: Global losses. Asian markets nosedive this morning. CNN (sic), Wall Street -- excuse me -- can Wall Street shore up after trouble in the housing market?
ALINA CHO, CNN ANCHOR: Under fire. Democrats want Attorney General Alberto Gonzales to resign. He tells us that's up to President Bush.

O'BRIEN: And crisis management. The president in Mexico today, dealing with the Gonzales problem long distance.

Those stories ahead on this AMERICAN MORNING.

Good morning to you, Wednesday, March 14th.

I'm Miles O'Brien.

CHO: And I'm Alina Cho, in for Soledad. She has the day off.

Thanks for joining us.

O'BRIEN: Welcome to another day of scrambling for your nest egg. Once again this morning, those markets in Asia closing down, way down. Losses from 2.5 to 3 percent in markets from Tokyo to Hong Kong to Sydney.

CNN's Eunice Yoon reports from Hong Kong.

(BEGIN VIDEOTAPE)

EUNICE YOON, CNN CORRESPONDENT (voice over): There's an old saying, the consumer is king. And for Asian companies, that consumer is American.

UNIDENTIFIED MALE: If the American consumer doesn't have money to spend, then these experts from around the world into (ph) the U.S. will also decline, and this will be a serious drag on global GDP growth.

YOON: But troubles are emerging in the U.S. housing market, especially with subprime mortgages, loans to homebuyers with less than stellar credit. Investors in Asia have growing concerns that Americans may slow their spending.

UNIDENTIFIED MALE: I'm increasingly worried, because it seems that problems with subprime mortgages are spilling over to the general economy. There is a rising risk that Greenspan was right.

YOON: The former chief of the Federal Reserve has said a recession in the U.S. later this year is a possibility. Disappointing retail sales and more frequent defaults on mortgages are feeding those concerns. And the worry shook Asia's stock markets Wednesday, with investors still jittery after a 9 percent plunge on the Shanghai Index weeks ago helped to spark a global sell-off.

SPENCER WHITE, MERRILL LYNCH: Obviously, a lot of the hedge funds have exposure to the U.S. housing cycle. And it will obviously impact both risk appetite, as well as the actual flow to the region, if they're taking losses elsewhere.

YOON: Property analysts here say America's housing troubles shouldn't directly affect real estate markets elsewhere in the world, but it could have a big indirect effect. The giant financial firms could grow more weary of granting loans to consumers all over the world, something they've been doing to beef up their profits, money that has been feeding spending worldwide.

Eunice Yoon, CNN, Hong Kong.

(END VIDEOTAPE)

CHO: Losses in Asia dragging down European markets now. It all began on Wall Street. The question now, will it end there today or keep going?

Ali Velshi here to explain what's going on with stocks.

And everybody watching the markets today -- Ali.

ALI VELSHI, CNN CORRESPONDENT: Right. We know what the subprime mortgage problem is. What we don't know is how it's whipped around the world and whether it's going to continue to affect us. Let's have a look at how Asian markets did overnight.

As you can see, we're looking at problems that -- obviously, the biggest index there is the Nikkei in Tokyo, down 2.9 percent. The Hang Seng in Hong Kong was off 2.7 percent. And in Shanghai, off 1.9 percent.

Now, those markets are all closed. And trading then shifts over to Europe, because someone is always trading stocks all the time in this world.

In European markets, these markets are still open. Frankfurt down 1.6 percent. Paris down almost 1.6 percent. And London down more than 1.5 percent.

Now, we've got markets in the United States opening in one hour and a half. How is it going to look? Well, the futures are pointing to a lower close for major markets in the United States.

However, as we just reported, one piece of good news is that General Motors has announced its first quarterly profit in two years and its first full-year profit since 1999. Will that be enough to lift markets? I don't know.

We'll keep an eye on all of this and we'll see whether the subprime mortgage cloud continues to hang over us.

O'BRIEN: Thank you very much, Ali Velshi. An above-prime report. Appreciate it.

The attorney general facing more heat today. A lot of calls for him to resign after the mass firing of those U.S. attorneys.

Alberto Gonzales told reporters mistakes were made when eight federal prosecutors were pink-slipped, but he denies it was a political vendetta. I spoke with the attorney general moments ago here on AMERICAN MORNING.

(BEGIN VIDEO CLIP)

O'BRIEN: But the question is, Mr. Attorney General, is, do you feel it's time for you to step down?

ALBERTO GONZALES, U.S. ATTORNEY GENERAL: That will be a decision for the president of the United States to make. I think if you look at the record of the department...

O'BRIEN: But should you tender -- should you offer your resignation? Is it time for you to offer your resignation?

GONZALES: That is -- that is a decision for the president of the United States to make. I'm going to be focused on identifying what went wrong here, correcting those mistakes, and focus on doing good for the American people.

O'BRIEN: But the decision on whether to offer your resignation is yours, is it not?

GONZALES: I'm focused on doing my job.

(END VIDEO CLIP)

O'BRIEN: So what now? Democrats in Congress are threatening subpoenas to make some key White House players testify.

CNN's Dana Bash has more on this story as it develops. She joins us live from Capitol Hill.

Dana, good morning.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Miles.

And the anger here really is palpable not just from Democrats, but even some loyal Republicans who you almost never hear criticize the White House. Why? Because they feel that they were lied to or, at the very least, misled by the attorney general and other top Justice Department officials who came here and said that these federal prosecutors were fired for cause and not political reasons. And the attorney general again insisted this morning that politics did not play into the decision to let these prosecutors go.

(BEGIN VIDEO CLIP)

GONZALES: Absolutely. Even more so today, because U.S. attorneys, I value their independence, their professionalism, what they do in the community. And this was not -- these decisions were not based for political reasons.

We made an evaluation. I directed an evaluation within the Department of Justice. I charged my chief of staff to look to see where we could do better in districts around the country. The decisions were not based in any way on retaliation, were not based in any way to interfere with an ongoing public corruption case.

(END VIDEO CLIP)

BASH: Now, that is not likely to satisfy lawmakers here who now have some e-mails from the attorney general's now former chief of staff saying point blank that political loyalty to the president was a criteria on whether or not these prosecutors should be fired from their jobs -- Miles.

O'BRIEN: Dana, tell us what Democrats are thinking about how will they pursue this investigation.

BASH: You know, if there's any example that you're looking for of how things are different here because Democrats are in charge, this is it. They not only are complaining about it, they actually are trying to do something about this anger.

Democrats in the House and the Senate and on the judiciary committees want to talk to the president's former counsel, Harriet Miers, who allegedly hatched this plan, her deputy, and also Karl Rove, the president's political adviser. Now, by calling Karl Rove to come talk to them, that sets up a potential showdown between Congress and the White House.

Why? Because obviously Rove still works for the president, and historically the White House has not allowed aides to the president to come and talk to Congress. The president has claimed executive privilege.

And the Senate Judiciary Committee did send letters to all of these current and former Bush officials saying that they do want to speak to them voluntarily. But if they don't, Miles, the chairman of the Judiciary Committee in the House and the Senate both have made clear they're going to send some subpoenas -- Miles.

O'BRIEN: It will be interesting to see how that one plays out.

BASH: Absolutely.

O'BRIEN: Dana Bash on the Hill, thank you.

BASH: Thank you. O'BRIEN: In just a few moments we're going to speak with one of the fired U.S. attorneys and see what he has to say about all this -- Alina.

CHO: President Bush wraps up his Latin American trip today with a joint news conference with Mexico's president, Felipe Calderon. They shared dinner last night in Merida.

CNN's Ed Henry traveling with the president, and he joins us from Merida, Mexico, with more.

Ed, good morning.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Good morning again, Alina.

You know, at this final press conference, the president will also have a final chance to make his last pitch on what has been the overriding message of this trip -- the U.S. cares about the desperate poverty all throughout Latin America and wants to do something about it. But it's perhaps fitting that this press conference is likely to have a headline that's going to be about that U.S. attorney story you just heard about, because it's almost a lock that the president is going to get a question about whether he still has full confidence in his attorney general.

And that has been the story of this trip, overshadowed and that overriding message, overshadowed by other controversies like the U.S. attorney, but also Hugo Chavez, the Venezuelan president, having this alternative tour through Latin America, beating up and insulting Mr. Bush throughout the tour, protests in every stop along the way. The president did more sightseeing, but perhaps there was less substance this time around.

He got out of his hotel more. We saw him touring Mayan ruins here in Mexico yesterday, trying to get out to the people and deliver that message I mentioned. Trying to show he really does care about the situation here.

But it is a tough crowd. There's a lot of skepticism all throughout Latin America. A lot of people feeling the president took too long, year seven in his presidency, to start dealing with issues like poverty, as well as the broader immigration reform that he's promising.

And finally, even President Calderon himself yesterday noted that the U.S. spent less attention on Latin America after 9/11. Obviously, attention had to be focused on the Mideast and other places, but there's a lot of anger still here in Latin America that the U.S. has not paid enough attention to these issues -- Alina.

CHO: And Ed, as you point out, you know, relations have been strained of late between the U.S. and Mexico. Did you get a sense that they've been able to mend fences with this meeting?

HENRY: Yes, absolutely. I mean, you know, Tony Snow, the White House press secretary, last night was trying to make the case that it's very warm. It's only been 100 days now that President Calderon has been in office, and there are working lunches and dinners.

Mr. Bush and President Calderon really do have a warm relationship, and they've mended some of the problems that have been out there on some issues. But when you ask about on a substantive standpoint -- and I asked Tony Snow, "What are the real accomplishments of this trip?" He really had a hard time pointing to anything of substance that -- real breakthroughs on this trip.

So maybe they've mended fences in a personal way, but they really are going home with very little in terms of substantive accomplishments -- Alina.

CHO: CNN's Ed Henry live for us in Merida, Mexico.

Ed, thank you.

And this programming note. Live coverage of that joint news conference with President Bush and Mexican president Felipe Calderon, that's today at 12:10 p.m. Eastern Time, right here on CNN -- Miles.

(NEWSBREAK)

(COMMERCIAL BREAK)

(WEATHER REPORT)

O'BRIEN: The attorney general is on the defense this morning trying to fend off calls for him to resign after that mass firing of U.S. attorneys. Eight of them were pink-slipped, seven of them on one day. Critics say it was a politically-motivated move.

Now, the first of the attorneys to get his walking papers is Bud Cummins. He joins us now from Little Rock, Arkansas.

Mr. Cummins, good to have you on the program.

BUD CUMMINS, FIRED U.S. ATTORNEY: Good morning, Miles.

O'BRIEN: Just a little while ago I talked to the attorney general, and I asked him if there was any sort of political motivation in all of this. Listen to his response.

(BEGIN VIDEO CLIP)

GONZALES: The decisions were not based in any way on retaliation, were not based in any way to interfere with an ongoing public corruption case.

(END VIDEO CLIP)

O'BRIEN: What do you say to that?

CUMMINS: Well, as far as that statement goes, I accept that that may be true, but the evidence now seems abundantly clear that some of these decisions were made for other reasons that may not be too attractive -- political pressure from outside the department by politicians and party people, just the desire to place friends and acquaintances that wanted to be U.S. attorneys in U.S. attorney positions, and they attempt to create the vacancies to do that.

O'BRIEN: The person who took your job, as a matter of fact, is an adviser to Karl Rove, a friend of Karl Rove, a political adviser to the president.

Do you think that was fair?

CUMMINS: You know, that's really not important. What I think -- I served at the pleasure of the president, and they asked me to leave, and I did. And they've actually been honest throughout most of this story about their motivations for asking me to leave.

So, it's really not that important about what happened, in my case, as it is in the other seven, where they maintained all along that these people somehow had performance issues that played into the decision to remove them. And I think the evidence is -- it's just abundantly clear now that that's probably not the case -- or, in fact, it's not the case.

O'BRIEN: Well, let me -- so wait a minute. Let me just say, by that logic then, if the attorney general came out and said, yes, it was political and this is the reason why, and was up front about it, would that be OK?

CUMMINS: Well, it would have been OK with us if they had just nothing. We all took these decisions -- we all knew we served at the pleasure of the president, we accepted the decisions, and we went home quietly.

It was only when the attorney general and the deputy attorney general endeavored to try and explain themselves to Congress, and they said that my colleagues had committed some kind of performance errors. You know, at this point, the attorney general saying his -- he had nothing to do with the process, his chief of staff handled it, his chef of staff has now resigned, he doesn't really know how they got to where they got, but he still stands by this idea that they're performance-related, I think it would be a lot more honest and fair to these other seven United States attorneys who served very honorably, very loyally to the president and performed very well, if they just simply said, you know, at this point, we're not sure why these decisions were made. And it appears that there were some factors taken into account that probably shouldn't have been, and we retract those statements and we recognize that these seven people served well and honorably, and that this was not our brightest shining moment, and move on.

But for some reason they seem to be stubbornly clinging on to this motion that there was a valid substantive management reason in those seven cases. And I just don't think that's true.

O'BRIEN: You have impeccable Republican credentials, a long-time supporter of the president, helped with the Florida recount. Do you point the finger at his direction on this? Who is to blame?

CUMMINS: Well, I'll say this -- I mean, I think my Republican credentials are in pretty good shape. And as a Republican, I'm disturbed any time that my own team doesn't seem to be wanting to deal in candor with the public and with Congress.

But the attorney general has, I believe, an absolute responsibility to insulate all federal prosecutors, the political appointees and these wonderful career people that we work with and the agents from outside politics. And the notion that a party chairman or a congressman or a senator from their outside perspective could be come critical of a prosecutor and a job action would be taken in response to that without any internal investigation or utilizing any of the procedures that are in place in the department to determine if somebody is following the book and doing their job, is pretty frightening to me.

O'BRIEN: About out of time. Just quickly, though...

CUMMINS: Yes, sir?

O'BRIEN: ... should Mr. Gonzales step down?

CUMMINS: That's not for me to say.

O'BRIEN: Does he -- does he owe you or the others an apology?

CUMMINS: He doesn't owe me an apology.

O'BRIEN: What about the others?

CUMMINS: I serve at the pleasure of the president. But the others, yes, he should apologize to them and he should retract his statements as to the other seven.

O'BRIEN: Bud Cummins, thanks for your time -- Alina.

CUMMINS: Thank you.

CHO: Coming up, can you name all four gospels? We have the answer for you as we test your bible literacy. It's a pop quiz. Don't worry, we grade on a curve here.

Plus, the war over the war. Liberals turning up the heat on lawmakers they thought were on their side.

Stay with us on AMERICAN MORNING. We're coming right back.

(COMMERCIAL BREAK)

CHO: Welcome back. The old song goes, "Don't know much about history..." Well, maybe the same could be said about religion.

We're not spending enough time with the good book. That's according to this new book, "Religious Literacy". It says Americans are shockingly ignorant about the bible. Well, we went out to test Americans to see if anyone knew who wrote the gospels.

Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Michael, maybe? Right?

UNIDENTIFIED FEMALE: I mean, I know then, but I just can't name them all.

UNIDENTIFIED MALE: OK. I can't do it.

UNIDENTIFIED MALE: All right.

UNIDENTIFIED MALE: So that's what I meant, like gospel writers... don't know.

(END VIDEO CLIP)

CHO: OK. Delia Gallagher, CNN's faith and values correspondent -- so, four of them?

DELIA GALLAGHER, CNN FAITH AND VALUES CORRESPONDENT: Four gospel writers, and we just asked people to name one. But, you know, there is a good point. Why should people know what that is? You know, if you're not Christian, maybe it doesn't matter to you.

But as you pointed out in the introduction, you know, religion is also history. So, the bible is also history, and that's part of the point that this writer is making, that these things are important because it has to do with what we know about history and what we know about ourselves.

CHO: And you don't need to go to church every Sunday to know that sermons are not really about bible lessons anymore. It's more about what can you do for me, right?

GALLAGHER: Right. And this is part of why we are where we are in terms of our religious illiteracy, because it's not taught anymore in schools. A lot of people think it can't be taught, that it's not constitutional. It is constitutional to teach the bible in school as a book, as history, as literature.

CHO: Well, the book is saying, listen, let us teach religion in schools.

GALLAGHER: Right.

CHO: Let parents opt out if they don't want to have their kids...

GALLAGHER: Right, that it can be optional. But the problem is that people are afraid of it. And it's fraught with litigation. If you try and introduce textbooks, and how are you going to do it so that you walk that fine line between not preaching, but teaching.

CHO: Well, so, the U.S., the most religious nation in the western world, we don't know that much about religion. Europe, on the flip side, not as religious as a continent, and yet they know a lot about religion.

So what's going on here?

GALLAGHER: Yes. Well, Europeans, of course, have religion in the history -- the very history of their countries. You know, a lot of them have state religions.

Queen Elizabeth, for example, is the head of the Anglican Church in England. So they have a different relationship. In America, we're the great experiment of having all of these religions, but not one established religion. And that creates all of the problems that we've seen.

CHO: And for the record, the four gospel writers -- Matthew, Mark, Luke and John.

GALLAGHER: Very good.

CHO: Did some studying.

Faith and Values Correspondent Delia Gallagher.

Thanks for your thoughts.

GALLAGHER: You're welcome.

CHO: Miles.

O'BRIEN: Now, hand on a bible, did you know that before?

CHO: No.

O'BRIEN: OK. Good you did your homework.

Well, there may be some salmon swimming upstream in a downstream market today, and they may be salmon on drugs, actually.

Ali Velshi is here to explain that.

VELSHI: Salmon on drugs.

O'BRIEN: Yes.

VELSHI: And those drugs would be made by GlaxoSmithKline.

Earlier I told you that General Motors posted a profit for the first time in what seems like forever. And that could help markets. GlaxoSmithKline could as well.

The pharmaceutical industry, as you know, has been under a lot of pressure in recent years. A lot of the big blockbuster drugs coming off of patent. A lot of problems, in particular, with Merck.

Well, GlaxoSmithKline, the biggest -- the second biggest drug company, got approval late yesterday. You were talking to Sanjay about this earlier for a breast cancer pill, Tykerb. It's got limited application in breast cancer, but it's positive application. And GlaxoSmithKline wants to push that further.

Now, this is a year in which GlaxoSmithKline will be facing some drugs that come off patent or face competition. Wellbutrin is one of them, the antidepressant -- Advair, the asthma drug, is another one of them. But it's got a bunch of things in the pipeline, or so it says.

One is a vaccine for cervical cancer. And we know that's got some history to it. But it also has broad appeal.

They've got a heart drug coming out and a migraine treatment. So, GlaxoSmithKline, at least some positive signals for that company.

Other positive signals today, as we reported, were General Motors reporting its profit for the fourth quarter and for the full year of 2006.

We'll see. We'll see if those things can tilt the market upward.

O'BRIEN: And you're going to be talking to some of the GlaxoSmithKline brass today?

VELSHI: I'm going to be talking in about five minutes to the CEO of GlaxoSmithKline.

O'BRIEN: Report back.

VELSHI: I will do that.

O'BRIEN: Thank you, Ali.

VELSHI: OK.

O'BRIEN: Coming up, Asian markets down across the board overnight. We'll have much more on what it means for you as the opening bell looms on Wall Street.

Plus, we're paging Dr. Gupta. He's here to talk about a positive new development in the battle against breast cancer. Ali just mentioned it. And we'll tell you about that drug, what it means to folks who are dealing with breast cancer.

The most news in the morning right here on CNN.

(COMMERCIAL BREAK)

(NEWSBREAK)

CHO: Here at home Senate Democrats are scheduling a vote today. Majority leader Harry Reid pushing a resolution requiring troops to withdraw from Iraq by next March. A lot of Democrats feeling the heat from supposed allies against the war.

AMERICAN MORNING's Bob Franken live on Capitol Hill to explain.

Hey, Bob. Good morning.

BOB FRANKEN, CNN CORRESPONDENT: Good morning.

And what is so ironic is now that the Democrats have taken power here they are feeling that heat, as you point out, from people who helped put them in power. It's a tactic called occupation.

(BEGIN VIDEOTAPE)

FRANKEN (voice over): Anti-war demonstrators barge into the offices of Maryland Democratic senator Barbara Mikulski. Mikulski says she's against the war, but apparently not enough for the protesters. They want her to vote to withhold supplemental funding for troops in Iraq.

UNIDENTIFIED FEMALE: Peace now!

FRANKEN: House Speaker Nancy Pelosi is also normally a champion of these groups, but last weekend, there they were, camping out in front of her home in San Francisco.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: I understand the frustration they have with the war that appears to be without end. I believe that what we are doing here will bring that war to an end. They don't understand that yet.

FRANKEN: Anti-war demonstrators say it's the Democrats who miss the point.

GORDON CLARK, PEACE ACTION: They claim to vehemently oppose the war, they regularly criticize the war, and yet they continue to vote for funding for the war.

FRANKEN: Congressman Rahm Emanuel, who led his Democratic Party to victory in the House by making Republicans defensive about Iraq, found himself on the defensive on the same subject.

UNIDENTIFIED CROWD: Troops home now!

REP. RAHM EMANUEL (D), ILLINOIS: Thank you.

FRANKEN: Many Democrats are not taking well to this at all. Like David Obey, long the liberal's liberal, who was caught on tape confronting a protester and probably wishing that YouTube had never been invented.

REP. DAVID OBEY (D), APPROPRIATIONS COMMITTEE CHAIRMAN: The liberal groups are jumping around without knowing what the hell is in the bill.

(END VIDEOTAPE) FRANKEN: Well, YouTube is new, but the tactics that are being used this time in this war are strikingly familiar and similar to the ones that were used in the Vietnam War. The difference is many of the people who are the targets of the demonstration were the demonstrators back then -- Alina.

CNN's Bob Franken live for us on Capitol Hill. Bob, thank you -- Miles.

O'BRIEN: The attorney general facing more heat today. A lot of calls for him to resign after the mass firing of those U.S. attorneys. Alberto Gonzales admits he made mistakes when eight federal prosecutors were pink slipped, but he denies it was a political vendetta. I spoke with the attorney general earlier here on AMERICAN MORNING.

(BEGIN VIDEO CLIP)

ALBERTO GONZALES, ATTORNEY GENERAL: I think that I did make some mistakes, and we're going to take steps to ensure that doesn't happen again, but ultimately, I work for the American people, and I serve at the pleasure of the president of the United States, and he'll decide whether or not I continue to serve as the attorney general.

(END VIDEO CLIP)

O'BRIEN: Democrats say they will subpoena key White House players for hearings on this matter -- Alina.

(NEWSBREAK)

M. O'BRIEN: James Cameron's claim that he found the tomb of Jesus and his family may have hit a scholarly iceberg, if you will. An expert on such matters in Jerusalem says the filmmaker made a key mistake reading one of the inscriptions on one of the tombs.

CNN's Ben Wedeman reports from Jerusalem.

(BEGIN VIDEOTAPE)

WEDEMAN (voice over): These simple stone boxes know as ossuaries are at the heart of the controversy, the subject of the documentary, "The Lost Tomb of Jesus". The filmmakers, Simcha Jacobovici and James Cameron, of "Titanic" fame, contend that the ossuaries contained the bones of Jesus, Mary, Joseph and Mary Magdalene. The first three, apparently common Jewish names at the time, but the clincher here is the Greek inscription on one of the ossuaries that the documentary claims says Mary-Ahm'-Nay.

JAMES CAMERON, "THE LOST TOMB OF JESUS": Mary-Ahm'-Nay is, according to certain Christian texts, the Acts of Philip and the Gospel of Mary Magdalene, Mary-Ahm'-Nay is the name of Mary Magdalene.

WEDEMAN: But in a recently published paper, biblical scholar Stephen Pfann argues the inscription actually says Mary and Madda (ph). He suggests it may be time for the filmmakers to go back to school.

STEPHEN PFANN, UNIVERSITY OF THE HOLY LAND: I would like to take these -- these people, Simcha Jacobovici and James Cameron, and give them a chance to be in our university for a semester and sit down and study through so they can really do the research they need to do a documentary properly with all of the scientific facts.

WEDEMAN: Most Christians believe that the tomb of Jesus is in Jerusalem's Church of the Holy Sepulcher, while the ossuaries at the center of this storm were found here in a tomb of the city's southern suburbs. Pfann doesn't dispute the filmmakers' claim that they found the tomb of Jesus. It's just not the right Jesus.

PFANN: I would say this is probably what we would call kind of another brand of science fiction. And what we have in this tomb, yes, is the tomb of another Jesus, but it certainly isn't Jesus of Nazareth.

(END VIDEOTAPE)

WEDEMAN: And, Miles, it comes with no surprise that this film has whipped up so much controversy, far more controversy in fact than merely a scholarly storm in a stone box -- Miles.

O'BRIEN: A little bit of a dark cloud over Mr. Cameron's project, I guess, this morning.

Ben Wedeman from Jerusalem. Get inside, would you?

Alina?

CHO: Coming up, Chad's tracking some extreme weather in Texas this morning. He has the latest.

Plus, new hope for women with breast cancer. Dr. Sanjay Gupta is in with details.

You're watching AMERICAN MORNING, the most news in the morning right here on CNN.

(COMMERCIAL BREAK)

M. O'BRIEN: A little bit of news coming to us from that briefing we told you about coming out of Baghdad. There you see one of the diplomatic leaders there for the U.S. embassy on the left, and then Major General William Caldwell on the right, briefing reporters. These are live pictures right now.

Just a few moments ago, Major General Caldwell said this, that he believes Muqtada al Sadr, the cleric and political, and as well as militia leader, who leads a Shiite faction with tremendous clout in Iraq is in Iraq after all. I'm sorry, is in Iran after all. I apologize. He said he is in Iran. We've been talking about this, his whereabouts for quite some testimony. and all kinds of conflicting information one way or another. Caldwell saying he believes that Muqtada al Sadr remains in Iran. The questions remains for all of us, what are his motivations? Why has he gone to ground in Iran? We'll keep you posted as that story develops -- Alina.

CHO: All right, we're watching that.

Also in health news this morning, the FDA just approved a new combination drug treatment for women with advanced breast cancer.

Dr. Sanjay Gupta joins us this morning from Los Angeles.

Hey, good morning again, Sanjay. So from what I'm reading, not a cure, but a big step forward.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Yes, but certainly could be, Alina. We're talking about women who have invasive breast cancer, about 175,000 women will be given that diagnosis in any given year. What typically happens after that is the tumor is actually tested. What they're looking for is something known as hertwo (ph). It's a marker, if you will, for a more aggressive type of breast cancer. If you had that in the past, there weren't many options, until a drug named Herceptin came along. Now Herceptin was a good answer. It actually improved survival, and Helped treat these aggressive, invasive breast cancers. The problem started it come when people could not tolerate Herceptin, or they developed too many side effects or the Herceptin simply wasn't working, and that's where today's news makes a bit of a splash.

A new drug called Tykerb to address specifically those women, women who do not tolerate Herceptin really well. Unlike Herceptin which is an IV medication, this is oral pill. Again, it is for women who have the specific positive marker on their tumor, HER2. It has modest side effects, some rash, some diarrhea perhaps. It also doesn't have any of the heart problems. Herceptin could sometime cause significant heart problems, heart failure even. This medication, Tykerb, at least initially, does not seem to have the heart any of those problems, as well. So potentially exciting out there.

CHO: You said 175,000 women, maybe as many as 180,000 cases of new breast cancer diagnosed in the U.S. each year. But this drug is not for everyone. So how many people could this actually help?

GUPTA: Well, we don't know for sure yet. The way that it's going to work probably for most women, if they're diagnosed with breast cancer, if they're found to be invasive and they have this marker, they're still going to get the Herceptin. That is still going to be the gold standard for women who have that type of breast cancer. It's just going to be for women who don't respond to the Herceptin or just can't tolerate any of the side effects. Not sure what that number is going to be as of yet. This is still very early, but you know, as of before this was approved, just recently, there were really no options for those women -- Alina.

Let's talk more about those side effects. I read about a few of them. Are they serious? GUPTA: It doesn't seem so. One of the biggest concerns with a lot of these chemo-medications is sometimes they can have consequences on the body in totally different places. For example, the heart. The chemotherapeutic medications can sometimes sort of impede the function of the heart, reducing what is known as ejection fraction, the heart doesn't work as well. This medication doesn't appear to have that. People may get rash, the may get diarrhea, but so far, at least in initial trials, small numbers, pretty modest side effects.

CHO: Sounds like real new hope for breast cancer patients.

All right, Dr. Sanjay Gupta, thank you for joining us this morning from Los Angeles.

GUPTA: Thank you.

(WEATHER REPORT)

O'BRIEN: This morning in Iraq, U.S. troops are on the move out of Baghdad pursuing Sunni insurgents who may have fled to avoid the security crackdown. As the fighting grind on, with no end in sight there, opponents of the war increasingly draw an analogy to the disastrous Vietnam War.

But is that an apt analogy, Paula Zahn has been looking into this. She's put together a special which airs on her program tonight at 8:00 p.m. Eastern.

Paula, is it an apt analogy?

PAULA ZAHN, CNN ANCHOR: It depends who you ask the question of. Obviously, it sparks a furious debate. And there's been so much news recently out of Iraq, and as the debate heats up about Congress and how it's going to handle the funding of the war, we want to look at how Iraq is affecting our soldiers in the field and how public opinion is shaping up.

Miles, take a look at this poll. It's interesting reflection, I think, of where public opinion is -- 58 percent of respondents say they believe the war in Iraq has turned into a situation like the Vietnam War. This was done back on November 17, 2006, last year.

But there are a lot of people out there calling Iraq a quagmire, and they are very concerned that we will repeat the mistakes of Vietnam. And of course, we'll have guests on tonight who completely dispute that, who say this has nothing to do with Vietnam. We're talking about different military strategies here, the media coverage is different altogether, and clearly they believe there is -- as dwindling as the support is for the Iraq War, they feel there was more public support for this war than there was Vietnam.

O'BRIEN: Now you mentioned the media coverage. Vietnam is the first television war. How does the coverage differ between the two wars, do you think?

ZAHN: Well, in this 24-7 news cycle, it's had a dramatic impact on public opinion. If you look at how the American public felt the first year of this war, the numbers were stunning compared to those today. The public really believed in the war, and then as the new business came clear that no weapons of mass destruction were found, we found public support for the war dwindling. But I think when viewers see a constant barrage of bombings in marketplaces, and whole families being blown up, and all these IEDs lying along the roadway, it affects public opinion, and it certainly has affected this president's popularity.

O'BRIEN: Paula Zahn, thanks for the preview.

ZAHN: But please join us tonight, because there'll be a lot of different guests. We've got generals on, Senators Max Cleland, some people who strongly believe that we learned nothing from Vietnam, and others who say, look, the difference is this war is winnable. So you'll see it all tonight.

Do you think you can stay up that late tonight?

O'BRIEN: I will stay up late, and if not I will put the DVR on, I promise.

ZAHN: You better.

O'BRIEN: A very special edition of "PAULA ZAHN NOW," 8:00 p.m. Eastern tonight. Don't miss it.

CHO: We'll be watching.

Something else we'll be watching, "CNN NEWSROOM" is just minutes away.

Tony Harris at the CNN Center with look at what's ahead.

Hey, Tony. Good morning.

TONY HARRIS, CNN ANCHOR: Hey, Alina, love to hear that. Good to see you.

These stories on the NEWSROOM rundown for you this morning. Investors rattled by the soaring defaults on subprime mortgages. We look at how this risky segment of the industry can impact you and we keep you posted on the numbers from Wall Street this morning.

Fat men are happier men. Ho, ho, ho. A study looks at the Santa Claus phenomenon.

Our Dr. Sanjay Gupta weighs in.

And ever been stuck for cash? Well, This little girl was. Her hand trapped in the ATM's money dispenser for three long hours.

Heidi Collins joins in the NEWSROOM. We get started at the top of the hour, right here on CNN.

Alina, back to you. CHO: Oh, that poor thing. I hope she's OK.

HARRIS: Yes, I'm sure she is.

CHO: All right, Toy. We'll be tuning in to see that.

Coming up, helping injured warriors. Meet John Folson. He makes life a little easier for families of wounded soldiers. And he's someone we think you should know.

Stay with us on AMERICAN MORNING. We're coming right back.

(COMMERCIAL BREAK)

M. O'BRIEN: And now the true story of an army for one. Fighting for soldiers in Iraq and their families back home, he's one of the people we think you should know.

CNN's Don Lemon introduces us.

(BEGIN VIDEOTAPE)

DON LEMON, CNN CORRESPONDENT (voice-over): Images of war may be commonplace on our TVs these days, but to some Americans, those pictures are reminders of families that have been torn apart.

UNIDENTIFIED MALE: When we go to war, our families go to war. They're paying a price, and we need to recognize that.

LEMON: Marine Reserve Colonel John Folsom says when soldiers come home wounded or don't come home at all it's the families that must deal with the emotional aftermath.

UNIDENTIFIED MALE: You've got kids who -- young kids -- where's dad -- growing up basically without a dad, or the trauma of dad walked out with two arms and two legs and because an IED blast, he's not the same guy who left.

LEMON: Colonel Folsom helped created a nonprofit organization called Wounded Warriors to help war-torn families. It's a vacation program that gives qualified families a chance to spend a week at one of the organization's two resorts in Texas and Florida, and visit area attractions all for free.

UNIDENTIFIED MALE: Get away for a week. Don't worry about physical therapy. Don't worry about unpaid bills. Don't worry about stuff. Focus on what's really important in our lives and our families.

LEMON: The cause has turned into a full-time job for Colonel Folsom, but he says it's well worth the work.

UNIDENTIFIED MALE: This is not a consolation prize for having received the Purple Heart. It's a children thing. It's for the kids.

LEMON: Don Lemon, CNN. (END VIDEOTAPE)

O'BRIEN: Don Folsom is planning to build an 80-acre retreat for vets in Nebraska. We wish well on that endeavor. You can find more information on his group at www.woundedwarriors.org. Should be there. Yes, it's right there on your screen there -- Alina.

CHO: In Texas this morning a search is under way for a man swept away by floodwaters after a heroic rescue effort. It happened near Austin, a flash flood trapping an elderly couple in their car. As firefighters went in, the swift current swept the couple away. These pictures are just amazing. Rescuers were able to save the woman, but they're still searching for the man, and they've got some problem weather problems there. Dense fog in the area. The missing man, by the way, is 80 years old. His name is Fred List (ph). The 78-year- old woman, presumably his wife, is in the hospital in stable condition.

Here's a quick look at what "CNN NEWSROOM" is working on for the top of the hour.

TONY HARRIS, CNN ANCHOR: See these stories in the "CNN NEWSROOM": Minutes from the opening bell, Wall Street shaken by defaults on high-risk mortgages. We explain how this affects you, and keep an eye on the numbers.

The Joint Chiefs chairman stepping back from his comments on homosexuality.

A wedding with a caveat -- the bride can never go home again.

A run-of-the-mill traffic stop erupts into a gun battle.

You are in the NEWSROOM, 9:00 a.m. Eastern, 6:00 Pacific.

(COMMERCIAL BREAK)

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