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Peru Earthquake; Mine Rescue Efforts; Tropical Depression Erin Makes Landfall

Aired August 16, 2007 - 09:00   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 are in the CNN NEWSROOM.
I'm Tony Harris.

HEIDI COLLINS, CNN ANCHOR: Hi there, everybody. I'm Heidi Collins.

Watch events come into the NEWSROOM live on a busy Thursday morning, August 16th. Here's what's on the rundown.

Desperate scene in Peru. Rescuers looking for survivors after a powerful earthquake. Hundreds of people dead and injured.

HARRIS: Erin drenching Texas right now. In the Atlantic, Hurricane Dean aiming at Caribbean vacation spots.

COLLINS: Noises heard from a bore hole at the Utah mine. Is it the trapped men?

Hint of hope in the NEWSROOM.

More than 300 people dead, some 1,300 injured. The latest casualty figures from a major earthquake in Peru.

We have new daylight pictures in this morning showing staggering amounts of damage. Homes and buildings reduced to rubble. Power out in many areas. The magnitude 7.9 quake struck off the coast about 90 miles southeast of the capital, Lima.

CNN's Eli Flournoy with more.

(BEGIN VIDEOTAPE)

ELI FLOURNOY, CNN CORRESPONDENT (voice over): For two long minutes, residents of the Peruvian coast felt the power of a 7.9 earthquake, and this is the result -- homes destroyed, injured rushed to hospital.

I-Reporter Fernando Calderon describes the scene.

FERNANDO CALDERON, AMERICAN VISITING PERU: For two consecutive minutes, the grounds is just shaking. And finally, this big shake came and everybody -- everybody -- everybody -- it was chaos.

Everybody started crying. Kids, everybody started crying. Everybody started running, like, towards, like, empty space. Everybody was afraid that the buildings were going to collapse.

FLOURNOY: The epicenter was located 90 miles southeast of Lima, some 25 miles below the ocean floor. Still, the strength of the quake enough to damage buildings in the capital. Schools and all public buildings in Lima have been shut down for inspection.

UNIDENTIFIED FEMALE (through translator): I felt it even though I was in a taxi. The car was vibrating and you could see all the buildings here in San Isidro and the glass vibrating.

People were running. All the passersby were grabbing their mobile phones. They wanted to call home but they could not.

FLOURNOY: Peruvian president Alan Garcia has declared a state of emergency in the area around the hardest-hit city, Ica. And on national TV, he warned of aftershocks being felt as far inland as Cusco in the Andes Mountains.

PRES. ALAN GARCIA, PERU (through translator): The truth is, the magnitude of the event is big, but be sure that after such violent quakes, much of the pent-up energy has been released from the tectonic plates.

After this, sometimes there are low-intensity aftershocks, but they surely won't have the same violent force. But for precaution, especially in the coastal areas, although tsunamis have been discarded, we must keep some distance.

FLOURNOY: The big question remains, what of the dozens and small villages and towns along the coast south of Lima? Authorities believe much of the coastal communications were knocked out by the quake and fear what they'll find as relief workers arrive to assess the damage.

Eli Flournoy, CNN, Atlanta.

(END VIDEOTAPE)

HARRIS: Fernando Calderon is an American visiting Peru. You heard him just a moment ago in that piece. He joins us by phone from Lima.

Fernando, good to talk to you.

If you would, give us a sense of what conditions are like right now on the ground where you are in Lima.

CALDERON: Well, right now it's a little bit chaos. Last night, it was just awful. There was another small earthquake like around 12:00, so people were really -- they were still concerned that there were going to be a little bit more aftershocks.

This morning is really -- I believe it's still too early to say. I believe there's like 400 dead, people dead. I don't know. It's -- it's an awful experience.

HARRIS: Yes. Fernando, if you could, just talk to us about what you saw yourself. Start last night and describe some of the sights. And just as important, the sounds of what you heard as this earthquake happened.

What did you see? What did you hear?

CALDERON: I was in the hotel room and I thought it was an airplane that was just passing probably too low. And there was a little -- you know, the ground started moving a little bit, so we started heading out of the -- out of the hotel. And then, we realized everybody was -- everybody was out. Everybody.

And the ground was still shaking for a minute. And then suddenly we start hearing -- suddenly we started hearing glass breaking, things falling out of the buildings. And that's when everybody started screaming, praying, children crying. It was just awful.

And then suddenly everybody started running towards an empty -- empty spaces, because we are surrounded by buildings here. I just -- you know, once people realized that the buildings were going to come down at some point, everybody started running, panicking.

HARRIS: Have you ever been in an earthquake before? Have you ever felt one before?

CALDERON: No. This is the first time. Been through hurricanes, and at least with hurricanes you have the warning.

HARRIS: Yes.

CALDERON: But with this thing, it is an awful experience.

HARRIS: Fernando, you have to -- you have to paint a picture for us here. I have actually been through a couple of aftershocks in Los Angeles, the Northridge quake there.

You have to describe for people what it's like to feel the ground underneath you start to move.

CALDERON: Well, it's unreal, because when you see -- when you're outside and you see all these cars moving, just by themselves, it is just unreal. When you see the buildings, they're just moving from left to right, and you just don't know if they're going to collapse or not, and it's an unbelievable experience.

HARRIS: And initially, you don't really know what to do or where to go, do you?

CALDERON: I didn't really know what to do, to tell you the truth. I just went to the first floor and I was hoping that there was going to be someone else. And then suddenly, I saw some people just walking out, because it seems like it's normal here, earthquakes. And I guess they're used to that.

But I guess they're not really used to that, you know, something so strong. And everybody just walked out the building very slowly.

HARRIS: Yes.

CALDERON: I mean, it was -- it was fine. But until -- this thing lasted for two minutes. It just wouldn't stop.

HARRIS: Fernando Calderon, an American vacationing in Peru.

Fernando, stay safe. Thanks for the call. And really, keep your family, you, stay safe. All right?

CALDERON: Thank you, sir.

HARRIS: All right.

COLLINS: Double trouble on the weather front this morning. We are tracking two storms.

First, Erin bringing heavy rain to the Texas coast this hour. It was downgraded to a tropical depression from a tropical storm as it made landfall just last hour. The threat of flooding, though, a huge concern, with the soil already saturated after heavy summer rains. The National Guard standing by, along with water rescue teams.

And, the first hurricane of the 2007 Atlantic season is churning in the Caribbean. Dean heading toward the Lesser Antilles. This could close in on the islands by tomorrow.

We are joining Bonnie Schneider now, who has a very, very busy morning, obviously.

(WEATHER REPORT)

HARRIS: You know, we ask you to do this all the time, and we're asking for your help again, particularly when the weather becomes the news. Please, send us an I-Report. I-Reports, I-Reports, I-Reports, we love them here. We love that you send them to us.

A couple of things we're watching today. Certainly Dean, Erin. And it's a natural disaster, but if you've got some pictures in Peru, send them along.

Go to CNN.com and click on "I-Report," or type i-report@cnn.com on your cell phone and share videos or photos, and always stay safe in doing so.

COLLINS: Rescuers calling it a sign of hope, a device picking up noise in a collapsed mine.

Our John Zarrella is in Huntington, Utah.

John, a lot of people just obviously hoping for the best on this one, but what are mine officials saying about the latest development?

JOHN ZARRELLA, CNN CORRESPONDENT: Well, Heidi, that certainly is some renewed optimism here, but at the same time, they say, listen, wait a minute. At the end of the day, this may be nothing. What they did was they place these six cylindrical devices called geophones on the top of the mountain behind me there. And of those six geophones, two of those geophones picked up some sort of a noise.

Now, you don't really hear the noise. It's like a graph. And on the graph it will spike up and down. So, based on that, they have made a determination they want to dig another fourth hole.

But the mine operator, Bob Murray, described for us what they think they heard.

(BEGIN VIDEO CLIP)

BOB MURRAY, PRESIDENT & CEO, MURRAY ENERGY CORP.: The sounds lasted about five minutes. And they were at a frequency of about a second and a half.

It could be rapping, but, sir, we really don't know. And I wouldn't read too much into it yet. But it is hope. It is hope.

(END VIDEO CLIP)

ZARRELLA: So, now based on the location of the two geophones that picked up this noise, they're going to start drilling on that fourth hole sometime this morning. That drilling may already be under way. We haven't gotten an update on that. They're going as fast as they can with that.

At the same time, yesterday at the news briefing, the head of mine safety here who actually has a cousin who is one of the men trapped said, listen, he believes they are alive down there, but at the same time, they are taking every precaution for the safety of the mine rescue workers.

(BEGIN VIDEO CLIP)

BODIE ALLRED, MINE SAFETY DIRECTOR: As the men that's come across to help out in this effort, I have looked at every one of them and I shook their hand as they come, as they go, as we do the training. And right off the top, the best thing that we can do right now is be safe in our efforts to get them.

I know these men well. I know they would not appreciate us taking any chances. And they know -- they know damn well that we are doing what we can do to get to them, and we're going to get there. There's no doubt about it.

(END VIDEO CLIP)

ZARRELLA: Now, we're also awaiting a release of the video from the camera that went down into the third hole yesterday. And what we are told, Heidi, is that it shows an area down there that was not impacted by the accident nine days ago, by the collapse of the mine, and it also shows a curtain which is used by miners. They can draw it they're trying to get some safety, run behind an area for some protection. Now, the problem is, they don't know if that curtain was actually drawn by these miners for protection or if it may have been drawn at some point before the actual collapse of the mine -- Heidi.

COLLINS: Yes, there's just no way to know until they get there, obviously, John.

I know the community came together though tonight on behalf of the trapped miners and their families. What can you tell us about that?

ZARRELLA: Yes, they sure did. It was a benefit concert in Huntington, which is about 20 minutes from here down outside of the canyon, down the mountain.

A lot of singing. A lot of music. A lot of food.

Everybody in the community, tight-knight community, of course, here, mining communities, all came together to support the families of the miners and to, you know, lend their prayers for these miners. And, you know, with the news filtering through of this noise that was heard, certainly, a little bit more of an uplifted spirit there last night at that benefit event -- Heidi.

COLLINS: Boy, they really need it, too, don't they?

John Zarrella, thanks so much.

ZARRELLA: Yes, they do.

COLLINS: Live from Huntington, Utah. Thank you.

ZARRELLA: My pleasure.

HARRIS: Another story we're watching, the Dow opening this hour below 13,000. How do we feel about 15,000 by...

COLLINS: Feeling strong.

HARRIS: Feeling strong? OK. Good, good, good, good, good.

I need you to keep that up. Look, I'm feeding off of your energy on this one.

It is the lowest start since April. Signs pointing to another sell-off today. We will find out when the opening bell sounds at the half hour.

COLLINS: Tropical trouble. Heavy rains in parts of Texas. Hurricane in the Caribbean. The very latest from the CNN hurricane center.

SEAN CALLEBS, CNN CORRESPONDENT: I'm Sean Callebs in Corpus Christi.

Erin has sunk her teeth into the Texas coast, now moves further inland. And the threat of flooding remains severe.

We'll have that story coming up in the NEWSROOM.

HARRIS: Deadly earthquake. Hundreds injured. Now a rush to save lives.

Our Dr. Sanjay Gupta live with the look at medical care in a quake zone.

COLLINS: And picking up the pieces following the deadliest attack in Iraq. And capturing a suspected bomb smuggler. New developments in the war this morning.

We'll have them in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Erin weakening this morning, but the storm could still spell trouble for Texas.

CNN's Sean Callebs live in Corpus Christi.

And Sean, good to see you.

What kind of an event are you experiencing down there? Pretty much rain and wind?

CALLEBS: Well, you know, Tony, to be perfectly frank with you, right now we're not experiencing anything. Those ominous clouds you see behind me pretty much dictating the way the weather scene has played out here over the past couple of hours.

Now, the outer bands of Erin, which has now been downgraded to a tropical depression, sort of punished this area overnight. They got about an inch of rainfall.

We have been out here for several hours. It was spitting rain when we came out. But as storms do, they are difficult to predict. We can talk to Bonnie Schneider and everybody else about those paths, but they thought it was going to hit the Corpus Christi area, but at the last minute, jogged a little bit to the north and really punished the town of Freeport.

We have some video of rainfall that fell there just about sunrise, and they got about four inches of rain. And of all the states that need precipitation, Texas is not one of them.

This is a state that has flooded several times even back to March, June, July. It is simply saturated. And we know that this storm, this tropical depression now, certainly got the attention of this state's governor, who had mobilized National Guard troops, as well as having emergency officials stand by. They were concerned about flash flooding.

Really, you know, Tony when you come to these areas, you see people get ready. They board up windows. HARRIS: Yes.

CALLEBS: They hit grocery stores. They get ready. We didn't see that this time.

It really didn't -- I don't mean to diminish -- because any time you have a tropical storm brewing in the Gulf, there's always the potential for serious weather. But the people who live along the Texas coast are used to weather like this. They're used to wind, they're used to rain, and it really didn't have that panic effect that you see so often.

And remember, there were no storms that threatened this area last year, so it was really the first time since Rita punished Texas, that another storm threatened this region. But all in all, Corpus Christi dodging the bullet.

HARRIS: Yes.

CALLEBS: Now the big concern, that rainfall is up in Austin, it is up at Houston. And it is coming down in buckets, those bands.

This storm was not characterized by organization. You don't see the tight eye wall. But this thing is going to bring rain to the state much of the day.

Back to you.

HARRIS: Yes. So maybe not too many I-Reports out of Corpus Christi. Maybe some I-Reports out of Houston, maybe Austin.

Sean Callebs with us this morning.

CALLEBS: Yes, keep them coming.

HARRIS: Yes. Yes. OK, Sean. Thank you.

Again, when weather becomes the news, as is the case there in Texas, please, send us an I-Report. I-Reports, I-Reports, you are great at sending those to us.

Just go to CNN.com and click on "I-Report," or type i- report@cnn.com into your cell phone and share your photos or your videos with us.

COLLINS: More than 300 people dead, some 1,300 reported injured. The latest casualty figures from a major earthquake in Peru.

Countless others could still be trapped in the mud and debris. The rush is on to save lives.

Our chief medical correspondent, Dr. Sanjay Gupta, is in Washington this morning.

And Sanjay, talk to us a little bit about the top concerns here for medical teams in that region. DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, you know, it was interesting just watching some of that video there. You saw the person actually performing CPR as they were trying to get someone to a hospital. So it's obviously a very tragic situation.

One of the problems there is that the hospitals themselves, the resources for a lot of these patients and the people who have just become patients, may have been devastated by the earthquake, as well. So you lost electricity, you lost a lot of water, you lost some of the resources to be able to take care of patients. So that's one of the big concerns.

But as far as the people themselves, you know, you worry about sort of injuries and waves. There are primary injuries as broken bones. You get crush injuries as a result of the earthquake itself. There are going to be secondary injuries over the next couple of days, people walking on broken glass, stepping on nails, being dehydrated, being without shelter. That's a concern as well.

Then there's sort of the third wave, where, you know, you've got standing water, you've got the concern about infectious diseases. You have bodies, dead bodies, frankly, that are in the streets and exposed.

So these are all going to be concerns over the next several days. Right now, the goal is to try and take people who have what are known as preventable deaths, who may have been severely injured and try to get them medical care as quickly as possible.

COLLINS: Which could be so very difficult.

Talk to us about the most crucial points, though, for relief efforts, as well.

GUPTA: Well, you know, a lot of it is going to be able -- if you can set up these temporary clinics in places, temporary hospitals in places where hospitals used to exist but are no longer there, and being able to get people from these areas near the coast to these medical clinics, that's going to be the priority number one. Again, to try to take care of people who may be dying right now waiting for some sort of medical care.

It's also going to be important for organizations that are already working on this to get clean water, get clean sanitation, and get these clinics set up pretty quickly. And then to try and restore some sense of order. You know, get wires up off the ground so people don't get electrocuted and set up some sort of organization.

COLLINS: They are just in absolute crisis mode from top to bottom, obviously, right now.

I know that you covered the tsunami and the Pakistan earthquake in 2005. Any way to tell from where you are now -- I know you haven't been to Peru as of yet, but how different is this situation?

GUPTA: Well, you know, it's hard to say. I was in Pakistan in the winter of 2005. And remember, that was a 7.6 magnitude earthquake at that point.

COLLINS: Right.

GUPTA: About 80,000 people died fairly quickly, Heidi, as you may remember. It was awful. It was absolutely awful. And people probably continue to be affected by that, even dying from it even almost two years later as a result of the impact of that earthquake. I don't know what's -- how significant -- if it's going to be as significant in Peru or not, but these can obviously be devastating natural events that can have impact that last a very long time.

When we were there, it was the mountainous area of Pakistan, very hard to get to, very hard to get any kind of medical care to the people that needed it the most. And it was winter, so it was freezing cold and people were without any kind of shelter.

So you can see the ramifications of a natural disaster like this can spin out in all sorts of different ways.

COLLINS: Yes, no question about it. The challenges are sometimes, it seems, insurmountable in something like this.

Appreciate it.

Dr. Sanjay Gupta, thank you.

GUPTA: Sure. Thank you.

HARRIS: And still ahead in the CNN NEWSROOM, danger on the ground. Planes getting way too close on crowded runways. What is the government doing to keep you safe?

ALI VELSHI, CNN CORRESPONDENT: And I'm Ali Velshi in New York, "Minding Your Business".

Less than five minutes to go before the opening of U.S. markets. It has been another rough night in Asia and in Europe and we are opening at a loss again.

I'll be back with more of that in just a minute in the NEWSROOM.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: And I'm Susan Candiotti, live in Miami.

It's day two of jury deliberations in the trial of Jose Padilla. A look at that story next in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: Hi, I'm Heidi Collins.

I'm glad to be here with you.

HARRIS: Good to be here with you.

Hi, Heidi. I'm Tony Harris. Welcome back, everyone, to the CNN NEWSROOM.

Unfolding this hour, a major earthquake, powerful aftershocks and a race to help hundreds of people injured in Peru. We have new daylight pictures in this morning showing some of the damage from the earth quake.

Take a look at this.

Homes and buildings reduced, as you can see here, to rubble. Power out in many areas.

The health ministry says at least 337 people were killed, another 1,350 injured. The magnitude 7.9 quake struck off the coast about 90 miles southeast of the capital, Lima.

Fernando Calderon is an American living in Peru. He describes what it felt like when the quake hit.

(BEGIN VIDEO CLIP)

CALDERON: For two consecutive minutes, the ground is shaking. And finally, this big shake came and everybody -- everybody -- everybody -- it was chaos.

Everybody started crying. Kids, everybody started crying. Everybody started running, like, towards, like, empty space. Everybody was afraid that the buildings were going to collapse.

(END VIDEO CLIP)

HARRIS: Rescue teams are struggling, as you can imagine, to reach some of the hardest-hit areas.

COLLINS: Just a few second away now from the opening bell at the New York Stock Exchange. But, boy oh boy, as we look at that live shot there, investors' time to buckle up once again.

Opening bell likely to bring some more bad news for the stock market. More selling expected today.

There you have it, live from the New York Stock Exchange. The opening bell today on this Thursday.

Hopefully, it is something that we will want to be looking at. I'm trying to remain positive here.

Ali Velshi is "Minding Your Business".

Boy, Ali, we've got overseas markets to talk about, risky loans. We've got housing starts a little bit later and all kinds of things going on with Countrywide Financial.

ALI VELSHI, CNN CORRESPONDENT: Yes.

COLLINS: Where to begin? VELSHI: Well, let's see what where this market is going. You're seeing this opening bell. Right now, stocks are going to trade probably about 100 points lower right at the open. That's what the math says.

COLLINS: Wow!

VELSHI: That's what the futures say. And what happened is yesterday we saw, at the end of the day, big selling. The Dow closed about 170 points lower. And then it went to Asia.

We had remarkable sell-offs across Asia. The Nikkei, which is, of course, the biggest index there, was down, you know, just about 2 and change percent.

The Hang Seng in Hong Kong was down lower.

We had two or three markets down more than 5 percent, some 7 percent. And, of course, that moved into Europe.

What are we seeing in Europe right now?

We've got the FTSE in London down more than 3 percent.

And then we come back to the United States. We had housing starts for July announced about an hour ago. They are the lowest in 10 years. We had building permits -- that's the number of permits that the house -- the home building companies are applying to for to build houses in the future, the lowest in 11 years.

Then we saw Countrywide Financial, which is sort of at the heart of some of this mortgage crisis. It's the largest lender in the country. Well, we saw Countrywide saying that they have taken -- they had an $11.5 billion line of credit. They've used -- they're using all of that money to keep its company going.

Yesterday, Merrill Lynch told its clients sell Countrywide. The company, which already had lost half of its value, went down another 10 percent or so yesterday.

It's going to get hit hard again this morning. We've got a 65 point -- 68 point -- see this market dropping again now.

You've got to try and make sense of all of this. If you're an investor, it is almost impossible to do so -- Heidi.

COLLINS: Yes.

And what can possibly be done to make yourselves feel a little bit better?

I guess it's worth reminding people that we are still at this massive number of 12,786 at the time being.

VELSHI: It's big.

COLLINS: It is a big number. So keeping it all relative, that being said...

VELSHI: You tell people to diversify and invest in a wide range of stocks, right?

COLLINS: Absolutely.

VELSHI: So the S&P 500 would be a good example of diversification -- 500 stocks. Many people, in their 401(k)s, have some version of an index fund or something that emulates the S&P 500.

Guess what?

Your gains for the year are erased. They're gone. You're flat on the year.

If you invested in European markets, you're actually negative for the year.

The Dow is just a little bit positive, but that could disappear soon, too. We're going to cross 100 points any second now.

So who do you look to?

You look to the central banks. The central banks were formed to make sure that when things like this don't happen, people don't run to the banks and the investment houses and the traders and say, I need the money back. I need to get out of this.

COLLINS: Sure.

VELSHI: If you sell your stock, you lock in any loss you've taken.

Now, every morning, Heidi, every morning the Federal Reserve and the central banks around the world in Canada, Great Britain, in Japan, they have been injecting money into the system. They do that by buying back government bonds. They buy the bond back and they give the banks who hold the bonds cash so that the banks don't run out of money.

Remember that a stock market drop is one thing. A run on the banks is another. The central banks are there to make sure that people don't panic and cash out and that the banks, if you do feel like cashing out, always have your money.

So even though the Fed hasn't cut rates, which is what a lot of people are calling for, they are doing something very similar. They are putting money into the system so that the banks don't run out of money. Fundamentally, that's -- that's one of the Fed's big jobs and they are actually doing that. Every morning at 9:30, they have a call with the major investment houses and they will provide as much money as needed. They buy their own bonds back and they give the banks those -- those dollars.

So they are in the game. They are on top of what's going on right now.

COLLINS: It seems kind of like a vicious cycle, though, doesn't it?

VELSHI: It is.

I mean somebody's -- somebody's got to get in there and this is how these things always end. Somebody gets in and says enough is enough. Property values aren't going to fall through the floor. Companies -- American companies aren't going out of business. The American consumer is not going to stop shopping. The world keeps on buying things. We keep driving cars and using oil.

At some point, this has to stop.

COLLINS: Right.

VELSHI: But the magic, of course, Heidi, is knowing where that point is.

COLLINS: Yes, because we're still looking, you know, the Heidi Index is saying 15,000 by Christmas.

I'm going with it.

VELSHI: You're not the only one, Heidi.

(LAUGHTER)

VELSHI: You're not the only one.

COLLINS: I'm not?

VELSHI: A lot of people we've spoken to have said it's that going that way.

But here's the thing. Mutual fund managers around the world -- Merrill Lynch spoke to them yesterday. It surveyed about 4,000 of them. They have about 4.4 percent of the money that they manage in cash.

Now, that's interesting, because mutual fund managers, you pay them to manage your money. They're not paid to keep money in cash. I can do that for you. If you just want your money in a bank account, I can manage it for you.

So, 4.4 percent is actually at the high end. Most of them never have more than 5 percent.

COLLINS: Right.

VELSHI: So they are ready -- they're holding some money back. At some point, they'll get back in.

COLLINS: All right...

VELSHI: But, you know, if anybody knew where the bottom of this market, then -- well, if I knew it, I wouldn't be here talking to you.

COLLINS: Exactly.

VELSHI: I'd be following (INAUDIBLE).

COLLINS: But I'm so glad that you are.

VELSHI: Thanks.

COLLINS: I really am. Ali Velshi, minding your business.

Thank you so much, Ali.

VELSHI: My pleasure.

BONNIE SCHNEIDER, ATS METEOROLOGIST: I'm CNN meteorologist Bonnie Schneider.

Moisture from Tropical Depression Erin pouring into Texas hill country. Plus, a hurricane is brewing out in the Atlantic.

I'll have a look at both of these tropical systems coming up next on the CNN NEWSROOM.

DAN RIVERS, CNN CORRESPONDENT: I'm Dan Rivers in Baghdad.

I'll have news of the latest violence across the capital and also news that U.S. forces say they've detained a high priority target who was allegedly smuggling arms out of Iran.

(COMMERCIAL BREAK)

COLLINS: We certainly have a lot going on.

Bonnie Schneider is in the Weather Center for now us now looking at hurricanes and tropical depressions for us, and trying to keep it straight for us, as well -- Bonnie, good morning.

SCHNEIDER: It's actually getting more simplified, Heidi...

COLLINS: Great.

SCHNEIDER: Because now we have one hurricane and one tropical depression.

(WEATHER REPORT)

HARRIS: So, not so much of an event in Texas. Maybe just a lot of rain. But we're certainly keeping an eye on Hurricane Dean.

When weather becomes news, count on us to bring you the very latest first.

And if you see severe weather happening in your area, please send us an I-Report. Go to CNN.com and click on I-Report or type ireport@CNN.com into your cell phone and share your photos and your video with us. COLLINS: The death toll keeps rising in northern Iraq, now at 500, the worst attack on civilians since the start of the war. And more violence today.

Live now to CNN's Dan Rivers in Baghdad -- Dan, good morning to you.

RIVERS: Good morning.

Yes, more depressing news here from Baghdad. First of all, there was another bombing in Central Baghdad, in Rusafi area, a commercial area, in a multistory car park. A bomb exploded. It was hidden in a car. It killed nine people and injured 17.

And then, as you say, right up in the northwest of Iraq, that death toll just keeps getting higher. At the moment, the ministry of the interior down here in Baghdad are saying 400 dead minimum. But up there, local officials saying 500 dead. So there's a bit of confusion.

They've still got all that heavy lifting equipment going in to those two towns, Bahaj (ph) and Sinjar, trying to clear all of the debris after those multiple truck bombs on Tuesday really flattened those two towns. Quite a huge attack. It looks like it will be pretty much the worst terrorist attack since the invasion four years ago.

COLLINS: Yes, that's what we've been hearing, Dan.

It's awful, to say the least.

Maybe there's a tiny bit of good news here, though. An arrest of a suspected bomb smuggler in Iraq.

Anything you can tell us about his possible connections to Iran?

RIVERS: Well, U.S. forces seem to be pretty pleased about this arrest. They are describing this arms smuggler as a high priority target. They say that along with his arrest, three other smugglers were killed, five were wounded after a raid in northeastern Baghdad.

They say this man was responsible for bringing in explosively formed penetrators, these EFPs which have been causing such mayhem over here...

COLLINS: Right.

RIVERS: ...with, as well as Katusha rockets and other bombs. They say there are clear ties to Iran and to the Quds force in Iran.

COLLINS: I imagine we'll be hearing more about that as they get more details.

Dan Rivers coming to us live from Baghdad this morning.

Dan, thank you.

HARRIS: And getting underway right now in Miami, day two of deliberations in the trial of Jose Padilla. He and two others charged with supporting terror. Three months of complex testimony leave the jury with a lot to sort out.

With me here in Atlanta, human rights attorney Charles Swift and our Susan Candiotti, covering the trial in Miami.

Susan, let's start with you.

Very complicated.

How difficult is it going to be for a jury to come back with a decision not just for Jose Padilla, but for the other two co- defendants?

SUSAN CANDIOTTI, CNN CORRESPONDENT: Well, that's the question, isn't it, Tony?

They have to wade through three months of testimony, widely regarded in many camps as being extremely boring at many intervals. But these jurors have to decide, basically, three counts of all three defendants, the most serious being whether these three men, including Jose Padilla, conspired to maim, to kidnap, to murder and carry out a jihad overseas. And this is all long before 2001.

Again, they have a lot of information to go through involving the three people.

So who knows how long it will take them?

They've completed one full day of deliberations and they've just been underway for about a half hour this day.

HARRIS: Yes.

Professor Swift, here in Atlanta, why is this going to be difficult?

Either Jose Padilla is a terrorist or he is not. Either he was meeting with Al Qaeda figures or not. Either you believe what Khalid Sheikh Mohammed has said about him or you don't.

CHARLES SWIFT, INTERNATIONAL HUMAN RIGHTS ATTORNEY: Well, it's difficult because the government's case is a circumstantial case. It's not a direct evidence case. They didn't use statements from many of the defendants.

HARRIS: Sure.

SWIFT: They have wiretaps and some of the things that they have overheard. But it's largely a circumstantial case. That can be very persuasive, but it is complicated. And as your reporter said on the scene, Susan said, it can be boring, too.

HARRIS: Yes.

SWIFT: So the jurors have a lot to go through. HARRIS: So, Susan, little or no human contact for Padilla for three years.

Did Padilla ever -- did he ever confess to the charges against him?

CANDIOTTI: Well, we don't really know that, Tony.

Certainly there has been some talk that -- from high value detainees such as Abu Zubaida -- that there may have been some information gained through, let's say, some -- what people are calling questionable interrogation techniques. Jose Padilla would call it torture.

In any case, the government denies that. That, in, fact, Jose Padilla may have been involved in some talk of putting together a radioactive bomb.

But certainly the Bush administration clearly said that when he was initially arrested. But then he was put in an Army -- a Navy brig -- for three years and the next thing you know, he was transferred to a civilian court. And lo and behold, there were no charges of being a radioactive bomber. Instead, he was attached to another ongoing case, which we just described.

HARRIS: So the charges changed.

All right,

Professor Swift, do we know what he was subjected to in isolation in terms of interrogation techniques?

What do we know from the case you successfully won before the Supreme Court, Salim Hamdan?

How was he treated?

SWIFT: Well, both of them -- both my client and Mr. Padilla were subject to long periods of isolation. We know that. We know it because Jose Padilla's lawyers filed a motion regarding it, setting out some details, that was never ruled on because none of Padilla's statements were ever introduced in trial so the judge didn't have to rule it.

In Mr. Hamdan's case, they had used isolation for eight months at the time that I filed my suit, wherein they basically had given Hamdan the choice of pleading guilty or just staying in isolation for the rest of his life.

And psychiatrists or psychologists would tell you that isolation over a prolonged period of time is the one of the strongest and most coercive factors that can be used on a human being. We just don't work well when we're by ourselves.

HARRIS: What about the interrogation techniques?

People want to know what the interrogation techniques were. What were these men subjected to?

Why can't we find out?

Why can't we just get the answer to that question?

SWIFT: Well, in my case, I'm under a protective order. And...

HARRIS: And what does that mean?

SWIFT: It means that I'm not allowed to discuss any of the interrogation techniques that were used on Mr. Hamdan. And Mr. Padilla's attorneys, also, to some extent, are under protective orders. That means the government considers how it interrogates someone to be classified information. So if you want to bring up how the interrogation was done, the government puts a total lid on any of the statements, etc.

HARRIS: OK. That's the circumstances with your case.

Susan, I'm curious, was Padilla ever put on the stand?

We understand that there was at least one judge who acknowledged his kind of diminished capacity.

Was he ever put on the stand to make that evident to a jury and, also, to testify as to his treatment?

CANDIOTTI: Well, he wasn't. And in pretrial proceedings, all of that was ruled inadmissible. His defense attorneys -- Padilla's defense attorneys -- did try to make a case that he had diminished capacity, but they were overruled. That never came out during pretrial proceedings. The judge said that that would not allow to be introduced.

But you remember, also, in some of the defense filings and photographs that we've seen, some of the treatment that he received -- his head covered, his arms in shackles, long periods of isolation. As Mr. Swift indicated, loud music being played, no human contact.

And so the defense wanted to bring this out, but it was not permitted. And that was decided before this trial even began.

HARRIS: Huh.

The strongest -- Susan -- and then one more for the professor.

Susan, the strongest piece of evidence for the prosecution against Jose Padilla?

What is it?

CANDIOTTI: Well, according to the government, or to the degree that they concentrated on it a lot, it would likely be this application form -- that's how the government sees it -- to attend an Al Qaeda training camp. And they pointed out that Padilla's fingerprints were on this application.

The defense said wait a minute, this doesn't prove anything, this form. Yes, his fingerprints are on the first and the last page, but they put on an expert that indicated that it seemed like he was handling it, but there's no proof that he had actually filled it out.

HARRIS: OK.

And Professor Swift, the truth here is that you were forced out. You won the Hamdan case and you were forced out of the military.

Tell me the truth. You were forced out two weeks later. There -- you were in line for a promotion and you were passed over for the promotion.

You were forced out because you won.

SWIFT: Well, you know, I've never looked into it. I don't care, in that sense. I've had a great career. I enjoyed what I did. I would do it again, knowing everything. I think it was the right thing to do in the Hamdan case and I'm extremely lucky because I'm here at Emory University, where I'm a law professor, and I'm having a great time and I don't think anybody should feel sorry for me.

But what we do need to do is fix this system.

HARRIS: Yes.

SWIFT: And the sooner we do it, the better.

HARRIS: Professor Swift, great to see you.

Susan, thanks for your help on this story.

CANDIOTTI: Yes, Tony.

COLLINS: And speaking of help, you might need a little help today. Not so sure, though. Because it looks like things are coming back a little bit, but obviously it's oh so very early in the trading day.

The Dow Jones Industrials averages sitting at 12,794, down about 66 points. We're talking about all kinds of things affecting stocks today -- the overseas markets, the risky loans, everything happening at Countrywide Financial and then housing starts, lowest in 10 years.

We'll talk more business stories coming up in just a few minutes.

Devastation in Peru -- a developing story all morning. Searchers count hundreds of people dead after a powerful earthquake.

(COMMERCIAL BREAK)

COLLINS: Well, no sense in trying to make sense of it. I guess that's probably the easiest way to say it. Now we're back down again. Just a few minutes ago, before the break, we were down about 40 points or so. Now the Dow Jones Industrial Averages down double that, 81 points for the time being.

Obviously, you can see for yourself there, those numbers closed below 13,000 yesterday. Significant, obviously, because we've been so far above 13,000. We really thought we were going in the other direction.

But several factors in play today. We are going to be talking about them.

Susan Lisovicz is coming up very shortly.

HARRIS: I can't get a loan. Credit crunch -- I can't get a loan.

Oh, the tease. I'm sorry.

Still to come in THE NEWSROOM, noise heard inside the collapsed Utah mine.

Is it coming from the trapped men?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They know damn well that we're doing what we can do to get to them and we're going to get there.

(END VIDEO CLIP)

HARRIS: Searchers with new hope today.

COLLINS: Dangers on the ground -- planes getting way too close on crowded runways.

What's the government doing to keep you safe?

You're in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: They are vulnerable to wear and tear.

So how do you keep your knees in top shape in your 30s, 40s and 50s?

A little oil maybe.

Here's medical correspondent Elizabeth Cohen.

(BEGIN VIDEO TAPE)

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT (voice-over): Al Posada has been into extreme sports ever since he was a kid.

AL POSADA, BAREFOOT WATERSKIER: As a young kid, I never ever thought about getting hurt. And it's just kind of slowly grown on me with age.

COHEN: As we age, many of our body parts start to suffer from wear and tear, knees especially.

DR. ANDREW WEIL, UNIVERSITY OF ARIZONA: Knees are vulnerable and I think the majority of new problems are the results of past trauma.

COHEN: The American Academy of Orthopedic Surgeons says past trauma can cause a wearing away of the knee cartilage lining, a painful condition called osteoarthritis.

To avoid this, Dr. Andrew Weil suggests that in your 30s and 40s, modify physical activity.

WEIL: And I can't tell you how many men I have seen who have refused to stop playing basketball in their 40s and really end up paying a very high price for that. Or both men and women who run and ignore signals that they're getting from their knees that running is not what they should be doing anymore.

COHEN: He said be especially careful if you play team sports, tennis or run on the pavement. Weil has a simple rule.

WEIL: Listen to your body and pay attention. And I think there's a common pattern of, you know, as people get older, not wanting to admit that their bodies are changing.

COHEN: And stop if your knees hurt. If you're not careful, you could end up with knee replacement surgery in your 40s, 50s or older.

More than 30,000 operations like this are performed in the U.S. each year.

Posada's injuries taught him to slow down in a smart way, to make sure to stretch before and after barefoot water skiing and not train when fatigued.

POSADA: The beginning of wisdom starts at 50. Well, say 51, because I'm starting to get it.

COHEN: Elizabeth, Cohen, CNN, Atlanta.

(END VIDEO TAPE)

COLLINS: Devastation in Peru -- hundreds of people dead, homes destroyed. The race to help the injured. The latest on a major earthquake along the country's coast.

HARRIS: And we split the screen here. Tropical trouble. Heavy rains in parts of Texas, a hurricane in the Caribbean.

The latest from the CNN Hurricane Center.

(COMMERCIAL BREAK)

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