Return to Transcripts main page
CNN Newsroom
Fed Cuts Interest Rates; Jena Six Controversy Grows
Aired September 18, 2007 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN CORRESPONDENT: All right. This is how it works. The rates come down. The Dow -- there you have it -- goes up, up 250 points at this moment. Now, it's a formula for profits on Wall Street, where investors are savoring some long-awaited relief from the Fed.
DON LEMON, CNN ANCHOR: That's right, Betty. A housing slump, a credit crunch, and market melees worldwide prompt the Fed to do something it has not done since June of 2003.
NGUYEN: Has it really been that long?
LEMON: It's been that long. You were just a mere baby then.
NGUYEN: Pretty big cut, though.
(LAUGHTER)
NGUYEN: Right.
LEMON: Yes.
Hello, everyone. I'm Don Lemon, live at the CNN world headquarters in Atlanta.
NGUYEN: Yes, hi, everybody. I'm Betty Nguyen, in today for Kyra Phillips.
You're in the CNN NEWSROOM.
LEMON: It is 3:00 p.m. here in the East, we start with this. A bigger-than-expected rate cut from the Federal Reserve sends stocks on Wall Street flying.
Our very own Susan Lisovicz is on the trading floor now. You know it's important when she's on the floor...
SUSAN LISOVICZ, CNN CORRESPONDENT: Yes.
LEMON: ... of the New York Stock Exchange, where this is quite a buzz. I can hear the hum around you, Susan.
LISOVICZ: Yes, it was actually a lot of commotion when the Fed did drop by 50 basis points.
Don, everybody on Wall Street knew the cavalry was coming. They just didn't know that Ben Bernanke and company was going to come with so much ammo. And that's what happened, a big, bold decision by the Federal Reserve today, as you mentioned, cutting interest rates for the first time in four years by a wider than expected margin, by half a percent, or 50 basis points in Fed speak.
Not only that. The Fed also cut the discount rate by the same amount and also completely changed the statement that accompanied it just from a month earlier. The Fed saying -- I'm just going break out a couple sentences here -- "that developments in financial markets since the committee's last regular meeting," which was on August 7, "have increased the uncertainty surrounding the economic outlook and that the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally."
That's what it's all about. And the reaction on Wall Street was immediate and big as well. The Dow basically tripled its gains. We had seen a lot of promise before the Fed move. But now we have a huge rally, and among the stocks that are making big moves today, retail stocks, because, when interest rates are cheaper, the idea is that people will spend more -- back to you, Don.
LEMON: All right. Susan Lisovicz, thank you for that update.
NGUYEN: Want to take you now to Ali Velshi. He is at the Chicago Board of Trade.
And, Ali, major banks are responding to the interest rate news, including one of the largest, which is acting awfully fast on this one.
ALI VELSHI, CNN CORRESPONDENT: Yes.
You know what happens? When the Fed lowers or raises its rate, the prime rate moves alongside with that. There's a three basis point spread, a three percent spread. So, the Fed rate is now at 4.75 percent. So, the prime rate is going to move to 7.75 percent.
We just got confirmation Bank of America, one of the biggest in the country, is lowering its prime rate by .5 percent rate to 7.75 percent. You will know -- by the end of the day, all the major banks will do that. And, so, if you have a credit card that is tied to prime, a car loan, a home equity loan, something like that, you're getting a big discount.
Now, that's what the Fed does. That's how that works. Over here at the Chicago Board of Trade, all sorts of things are traded, including treasuries. Adjustable rate mortgages are financed in that market. And so when you see this rate come down on the Fed side, these rates come down over here as well.
So, if you were one of those people with an adjustable rate mortgage that was going to reset, you now probably face a lower reset rate. On the other side of that equation, Susan told you about the stocks that are out. Those retail stocks, some of them are 4 or 5, 6 higher today because there's a sense people will spend more. That is why Oil is higher today, another record settle, because people will spend more.
Commodities are up. We had record prices on wheat. Gold, silver, all those kinds of things are up and then you start worrying inflation, because, when you give people a discount on interest rates, Betty, what happens?
NGUYEN: They spend.
VELSHI: They spend.
NGUYEN: Yes.
VELSHI: They borrow more. They spend. They run up those credit cards, whatever.
So, it's hard to know how this is going to have an effect in the end. But today, generally speaking, if you're an investor, you got a 401(k), you got pensions, you have debt, you have credit cards, you have loans, this was a good day for you.
NGUYEN: All right. We will be checking those rates as we speak. I'm going to check my credit card, my loan, and all of that.
Ali, thank you.
Hey, before we went to break, we did ask you this question. How long is the term for the members of the Board of Governors of the Federal Reserve? Well, here is the answer: 14 years.
I knew you knew it.
All right. We are covering the Fed's decision on all fronts here. So, to get more on the implications for stocks, bonds, currencies, and that lackluster housing market, all you have to do is go to CNNMoney.com.
LEMON: A broad request gets a tentative rejection.
This afternoon, a California judge refused to let the family of Ron Goldman get their hands on a wide range of O.J. Simpson's possessions, everything from autographs to video games to the sports memorabilia Simpson is now accused of stealing in Las Vegas.
But the judge is giving the Goldmans' attorney a week to streamline the request and come up with a list of the allegedly stolen memorabilia. The Goldmans' lawyer says the family deserves much more.
(BEGIN VIDEO CLIP)
DAVID COOK, COLLECTIONS ATTORNEY FOR GOLDMAN FAMILY: It will be a cold day in hell before you ever see a piece of paper, on that piece of paper bearing the signature of O.J. Simpson and Fred Goldman. It will not ever occur.
Mr. O.J. Simpson took from Fred Goldman his son, murdered him brutally, stabbed him 30 times, when Mr. Ron Goldman was the wrong person, at the wrong time and the wrong place. It is inconceivable that the father of a murder victim would sit and bargain, haggle, with the murderer over recompense. It is revulsive to everybody.
(END VIDEO CLIP)
LEMON: Well, Simpson was acquitted in 1995 of the murder of Ron Goldman, who was found stabbed to death, along with Simpson's ex-wife.
Let's get more now on the growing police investigation into the Simpson armed robbery case.
CNN's Ed Lavandera is outside the Las Vegas jail where O.J. Simpson remains an inmate.
Ed, update us on the investigation.
ED LAVANDERA, CNN CORRESPONDENT: Well, what we're waiting for is a couple over things, specifically, prosecutors who say that they will be filing formal charges against O.J. Simpson. And that will really get this case starting to move forward.
From the moment of the arrest, they have 72 hours to get all of that paperwork and all of these initial hearings into motion. So, O.J. Simpson scheduled to be in court tomorrow morning for that preliminary hearing, an arraignment hearing as well. And there's also the bail hearing, of course.
Remember that there have already been two other people arrested along with O.J. Simpson because of what happened in that hotel room here in Las Vegas last Thursday evening. Two of those suspects have already been arrested and booked out, released on their own recognizance as this case moved forward.
O.J. Simpson still sits here in the jail cell in Las Vegas. And his attorney says that if he had any other name, if O.J. Simpson wasn't his name, he would have already been released in this case on his own recognizance as well.
So we await to see how that will move forward here in the coming hours and into tomorrow morning as well.
Now, we have also heard from one of the victims, the alleged victims in this case, a man by the name of Alfred Beardsley, who was one of the men that O.J. Simpson had gone into this hotel room to retrieve he says some of his own sports memorabilia back from one of this men.
You can hear a little bit about what he told Larry King last night.
(BEGIN VIDEO CLIP)
ALFRED BEARDSLEY, ALLEGED VICTIM: You know, this was a very small room in the seedy hotel that Riccio was staying at. And I only saw one. This guy came over and ordered me at gunpoint to pack the items up in the boxes we brought them in. I refused. And I was sitting in a chair and I was told to get the F up, get the F up. And I did get up.
(END VIDEO CLIP)
LAVANDERA: And, as Mr. Beardsley says right there, that guns were used. Of course, this is something that O.J. Simpson throughout the weekend and last few days had been disputing, saying that he never saw any guns involved in this case at all. And, of course, that is just one of the issues here.
One of the other outstanding issues as well is that investigators say they still are looking for two other suspects in this case and witnesses that they want to talk to and they have not been able to do so just yet -- Don.
LEMON: In Las Vegas, CNN's Ed Lavandera -- thank you, Ed.
NGUYEN: Let's take you now to Jena, Louisiana. You can see a population boom this week, because thousands could pack the town Thursday to protest what they consider racial injustice.
Six African-American teens including one juvenile are accused of beating up a white classmate. And today lawyers for one, Mychal Bell, filed a motion to get him out of jail. And some say the punishment for the so-called Jena six is too harsh and racially motivated. Today, police talked about they are going to handle the influx of visitors.
(BEGIN VIDEO CLIP)
COLONEL STANLEY GRIFFIN, LOUISIANA STATE POLICE: With mutual respect that's between the event participants and the police officers. This event will be secure and it will be uneventful.
The police is here to assist and to assure that public order is kept, and that everyone has the right to exercise his or her constitutional rights. That is the reason why law enforcement is here.
(END VIDEO CLIP)
NGUYEN: Well, Jena's mayor says seven different groups have applied to march on Thursday, and he welcomes all of them.
LEMON: Two very different stories collide in Gary, Indiana, where the police are on the defensive for their work on a car crash in which two teens died. Those boys' bodies were found not by officers or rescue workers, but by one of their fathers hours after the scene had been cleared.
The coroner says both teens died instantly, but that has not solved many of the questions about this tragedy.
Reporter Sean Lewis of our affiliate CLTV has the latest.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: It was two more down there. I was missing two. I was missing two.
SEAN LEWIS, CLTV REPORTER (voice-over): The pain is deep and still very fresh for the families of the Gary crash victims.
The parents of Brandon Smith, one of the teens who died, visiting with the driver of the car, Darius Moore, as he continues his recovery. Neither family paying much attention to the coroner's report that says 18-year-old Smith and his friend, Dominique Green, died almost instantly after the crash.
Arthur Smith found the bodies of his son and friend six hours after that crash still at the scene. Police have already left.
DARIUS MOORE, ACCIDENT VICTIM: I thought, when I seen the police, that everything was going to be OK. I thought that I was going to have all my friends. Everybody was going to go to the hospital and get worked on and we was going to make it through.
LEWIS: Darius says he told police his friends were still down at the scene of the crash and felt they were still alive.
The police chief has a different story.
THOMAS HOUSTON, GARY, INDIANA, POLICE CHIEF: If there was no chance to save their lives, this is a moot point, how long they were there.
LEWIS: Police Chief Thomas Houston says alcohol was in the systems of both survivors, that speed was a factor in the crash and that at 3:00 Saturday morning, his officers deserve to be commended, not condemned for their actions.
HOUSTON: You have to understand, the information that the officer got from these two parties who survived said they may have dropped their friends off and they may not have. They don't remember. And the accident didn't happen where they stated it happened, which we can understand, because they could have been disoriented, traumatized, fear. And no matter what other emotion they were going through, we didn't get good information.
And how can you get good information from the 17-year-old that's been drinking?
LEWIS: Smith says that confusion is the very reason why more should have been done to find his son and his friend before he found them hours later in the morning light. The chief says differently.
HOUSTON: It's not law enforcement's fault. We didn't cause it. There was nobody to rescue. It was just a recovery. And if the father had the information at 3:00, why he didn't go out until 9:00 a.m. in the morning? Nobody is asking him these pointed questions. That's his son.
LEWIS: Now, Arthur Smith is not content with the Lake County, Indiana, coroner's report, calling for an independent autopsy be performed on his son to determine the exact time of death for him. Gary Police wouldn't comment on whether or not charges would be filed against the two survivors of the crash because their blood-alcohol level was elevated.
Reporting from Gary, Indiana, I'm Sean Lewis, CLTV News.
(END VIDEOTAPE)
NGUYEN: They are paid to police a war zone, but exempt from military rules and some say it is a surefire path to problems. We're going to take a closer look at the debate over private security contractors in Iraq. That's ahead in the NEWSROOM.
LEMON: Well, you have seen them. There's a picture of them. They're all the rage, but do they put your toes at risk? That's a big question. Ahead in the NEWSROOM, we will hear from parents who say Crocs ought to get the boot.
NGUYEN: And do you remember mom telling you to wash your hands after you go to the bathroom, right?
LEMON: Mm-hmm.
NGUYEN: Well,, hopefully, you're doing that. But if you don't, a new survey show that you are probably male.
Don, let me check those hands.
Coming up, I have got the dirt. And it's not pretty.
All right. Yours are pretty clean.
LEMON: Yes, looks good.
NGUYEN: Not bad.
(LAUGHTER)
(COMMERCIAL BREAK)
LEMON: Sixteen past the hour. Three of the stories we're working on for you here in the CNN NEWSROOM.
Are you paying big interest on your loans? The latest move by the Federal Reserve could mean more money in your pocket. The Fed has cut a key interest rate by half a percentage point, its first cut, get this, four years.
Two campus cops are on leave. And the University of Florida's president is asking for an investigation after a scuffle with a student. Officers Tasered 21-year-old Andrew Meyer during campus forum with Senator John Kerry. School officials say Meyers refused to leave the microphone after his allotted time was up. But critics say, the cops overreacted.
Also in Florida, thousands of people mourned a slain Miami Dade County police officer today. He was killed by a gunman last week during what started as a traffic stop.
NGUYEN: On a totally different other subject, kids, they just love their flexibility and grip, but is that what makes Crocs risky to wear?
Well, the rubber clog is being blamed around the world for foot injuries, many occurring on escalators, where the soft sole can get caught.
The Croc-clad foot of 4-year-old Rory McDermott got snagged on an escalator in Virginia. And his mother explained what happened on CNN's "AMERICAN MORNING."
(BEGIN VIDEO CLIP, "AMERICAN MORNING")
JODI MCDERMOTT, MOTHER: He was standing still, and it was in the middle of the escalator ride.
And what it does is the way they grip, and the rubber took the bottom of the shoe. You can kind of see it. This is his other shoe. It's in pristine condition. And you can kind of see -- I hope you guys can -- where it looks like it's grabbed hold of the shoe.
And like I said, I was above him pulling, so I didn't see exactly, but it twisted his foot, and that is how it ripped his toenail. And you can see where the shoe is ripped open here. And the strap came undone, and it totally wore up the top of the shoe.
(END VIDEO CLIP)
NGUYEN: Well, some transit systems are placing warning signs about wearing soft-soled shoes.
LEMON: You go to restroom, Betty, when you're done, you wash your hands.
NGUYEN: We're getting a little personal here, but yes, OK.
LEMON: You wash your hands, right?
NGUYEN: Of course I do. And you?
(CROSSTALK)
LEMON: I do, always. I'm sort of a fanatic about it.
Or do you? A new study reveals a dirty little secret about hand- washing.
(CROSSTALK)
NGUYEN: Oh.
LEMON: Here's medical correspondent Elizabeth Cohen.
(BEGIN VIDEOTAPE) ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Believe it or not, even with all the messages out there saying wash your hands, wash your hands, it's the best thing you can do to prevent disease, fewer people are washing their hands than years ago.
Well, who exactly out there is ignoring the most basic of human hygiene? Well, it's men. Observers went into public restrooms in baseball stadiums and found at one particular stadium that the men, 57 percent, that's it. Just 57 percent washed their hands. But for the women, 95 percent of them washed their hands.
Now, again, the Centers for Disease Control says that washing your hands is one of the most important things that you can do to keep yourself from getting sick. All sorts of things can lurk on your hands, E. coli, stomach viruses. If you don't wash your hands and then you shake someone else's hands, you could get them sick.
One of the polices where germs lurk the most is bathrooms, of course, and in particular, bathroom floors. Now, you might think, well, that's OK. I don't crawl around on bathroom floors. I don't have to worry about that. Well, in fact, you do, because, chances are, you go into a bathroom with a purse, or a briefcase, or a backpack. You put it on the floor.
And then when you get home, do you ever put that bag on the dining room table? Well, if you do, you can only imagine what happens then. So, again, the message, wash your hands. Many people after using public restrooms aren't hearing it -- back to you.
(END VIDEOTAPE)
LEMON: The same thing with luggage, too, in the airport.
(CROSSTALK)
NGUYEN: Yes, but, hopefully, you're not setting that on your dining room table.
(CROSSTALK)
NGUYEN: That's why I always put my purse on that little hook right there.
But, OK, 57 percent of men don't wash -- 95 percent of women wash their hands. So, I'm good.
LEMON: I have to say, like I said, I'm a little fanatical about it. always wash. I don't always do the happy birthday if I'm going in a break to the restroom.
NGUYEN: You keep it under there as long as...
(CROSSTALK)
LEMON: But I do use as long as I can to get back to the set. But I do have to say, I do see guys walking out of the bathroom and not washing their hands.
NGUYEN: I will admit I have seen women do it, too.
(CROSSTALK)
NGUYEN: You almost want to stop them and say, wait a second, would you mind just going back and just washing that for a second?
LEMON: I just know never to eat after them.
(LAUGHTER)
NGUYEN: Or shake their hands.
LEMON: And shake their hands, right.
NGUYEN: All right.
Well, we're going to move on to this story. The New York Knicks' coach is in trouble for some foul language. Yes, a former team executive accuses Isiah Thomas of sexual harassment. We have the latest. That's ahead in the NEWSROOM.
(COMMERCIAL BREAK)
NGUYEN: Well, a bigger-than-expected rate cut from the Federal Reserve sends stocks on Wall Street just flying today.
Susan Lisovicz is at the trading floor of the New York Stock Exchange, where there is still quite a buzz.
Hey there, Susan.
LISOVICZ: Hey, Betty.
In fact, CNN Money, our fine colleagues over there, said they talked to an economist who says they're having champagne and cookies.
NGUYEN: Yes.
LISOVICZ: The reaction on Wall Street quite favorable. Alan Greenspan had all of headlines yesterday, but today it's Ben Bernanke's show.
The Federal Reserve coming through with a bigger-than-expected rate cut, the first rate cut in four years, half a point, half a percentage point, or 50 basis points, also lowering the discount rate by the same amount and then really rewriting its statement from just a month ago at the last Federal Reserve meeting, saying that developments in financial markets since the committee's last regular meeting have increased the uncertainty surrounding the economic outlook. The tightening of credit conditions has the potential to intensify the housing correction and restrain economic growth more generally.
A rate cut hoping to change those conditions. And we saw immediate reaction, because Bank of America, one of the nation's biggest banks, said it's lowering its prime rate to 7.75 percent. And that's the rate that it charges its best customers. So, yes, it's something that the public can immediately feel as a result of what the Fed did at 2:15 Eastern time today -- Betty.
NGUYEN: All right, be sure to check your rates today.
Susan, thank you for that.
LISOVICZ: You're welcome.
NGUYEN: And we are covering the Fed's decision on all fronts today, so you can more on the implications for stocks and bonds, as well as currencies and that lackluster housing market. You can get all of that at CNNMoney.com.
Today's move by the Fed is the big question on our CNN.com Quick Vote.
LEMON: Yes, it's probably the big question on a lot of people's mind today.
We asked you, do you think a Fed interest rate cut will calm financial markets and help the housing slump? Well, right now, 45 percent of you say yes; 55 percent say no.
NGUYEN: That's interesting, yes.
(CROSSTALK)
LEMON: Click on Quick Vote at CNN.com.
Paid to police a war zone, but exempt from military rules, some say it's a surefire path to problems. A closer look at the debate over private security contractors in Iraq -- ahead in the CNN NEWSROOM.
(COMMERCIAL BREAK)
LEMON: Now let's get to the Big Board. That really is the big news of the day. Look at that, Dow up 295 points, rallying after the Fed cut interest rates for the first time in years, after several.
We're going check with Susan Lisovicz in just a bit. She's going to give us a full update. Plus, the closing bell is coming up in about 30 minutes.
After several dismal economic indicators, some analysts are tossing around the R-word. That word is recession. But our latest CNN/Opinion Research Corporation poll finds most Americans still believe the economy is in decent shape.
Fifty-four percent say conditions are very good or somewhat good. Still, that's down from 63 percent at the start of the year.
Most Americans are optimistic, too. Sixty-two percent say a year from now the economy will be very good or somewhat good.
Let's talk about the situation now in Louisiana -- Jena, Louisiana, which could see a real population boom this week. Thousands could pack the town Thursday to protest what they consider racial injustice.
Six African-American teens, including one juvenile, are accused of beating up a white classmate. Today, lawyers for one, Mychal Bell, filed a motion to get him out of jail. Now, some say the punishment for the so-called Jena 6 is too harsh and racially motivated.
Today, police talked about how they're going to handle the influx of visitors.
(BEGIN VIDEO CLIP)
COLONEL STANLEY GRIFFIN, LOUISIANA STATE POLICE: With mutual respect that's between the event participants and the police officers. This event will be secure and it will be uneventful. The police is here to assist and to assure that public order is kept and that everyone has the right to exercise his or her constitutional rights. That's the reason why law enforcement is here.
(END VIDEO CLIP)
LEMON: In Atlanta, students from several of the historically black colleges and universities marched today. Their slogan -- "I Am The Jena 6."
(BEGIN VIDEO CLIP)
AMBER SCOTT, SPELMAN COLLEGE SENIOR: It sends the message to the world that we are not complacent. This is something that resonates inside of us as young students, as individuals coming together. These are three or four schools coming -- historically black colleagues and universities coming together in support of our brothers, you know, who are nine hours, miles and miles away. But their relationship is still the same, because, again, it could have been any one of us.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
KOREE HOOD, MOREHOUSE COLLEGE STUDENT: We're sending the message that we can no longer tolerate blatant racism. We must join together -- everybody black, white, no matter what nationality you are. And it represents unity when we face injustice.
(BEGIN VIDEO CLIP)
REGINALD MCKINLEY II, EVENT ORGANIZER: Number one, awareness on what is going on in Jena. Number one, that is the whole purpose of this. Secondly, it's to show that there is a youth movement backing this that is very reminiscent of the civil rights movement, but it is not the civil rights movement, because we are in a different time dealing with different issues and we have learned from our forefathers and now we're progressing in their nonviolent movement.
(END VIDEO CLIP)
LEMON: Jena's mayor says seven different groups have applied to march Thursday and he welcomes them all.
Some Jena residents say they wish the outsiders would stay out and the spotlight on their town would dim. You heard that last hour in the CNN NEWSROOM. Others think the spotlight isn't bright enough.
CNN's SIU, special investigations unit, takes you beyond the sound bites in the Jena case.
Don't miss our Kyra Phillips and the hour long special report, "Judgment in Jena". It's this Thursday at 8:00 p.m. Eastern right here on CNN.
NGUYEN: Well, it's being called a Blackwater backlash. Iraqi government ministers are standing firm behind the Interior Ministry's decision to shut down the American private securities firm. But that ban is not in effect.
Just a short time ago, word from the State Department that Blackwater contractors are still on the job, at least for now. And for private security companies operating in Iraq, every day brings new dangers.
CNN's Aneesh Raman reports from Baghdad.
(BEGIN VIDEOTAPE)
ANEESH RAMAN, CNN CORRESPONDENT (voice-over): As head of the private security company AISG, Carter Andress knows well the difficulties of working in Iraq. He's the author of the book "Contractor Combatants". And we spoke with Andress following Sunday's shooting involving contractors from Blackwater that left eight Iraqis dead, all of whom the Iraqi government says were civilians.
CARTER ANDRESS, AMERICAN-IRAQI SOLUTION GROUP: These guys are continuing their lives as soldiers. And as a soldier, you know, your job in this mission we have here is to put your life at risk before you put the Iraqi civilians' lives at risk, and your clients' lives at risk, too. And, you know, I get the feeling here that that wasn't -- that standard wasn't met.
RAMAN (on camera): Are you -- are they, Blackwater, legally accountable to anyone?
ANDRESS: Well, that's a very -- that's a big gray area. And so as a result of the extrajudicial relationships established by the U.S. military and DOD contractors, the likelihood of these guys ever being prosecuted on a criminal basis is minute, from my assessment.
RAMAN: And the likelihood of their license being revoked having any impact on their day to day operations is what? ANDRESS: In real terms, their relationship as a Department of State, you know, under the U.S. Department of Defense relationship with the Iraqi government and in the Iraqi theater of operations, that contract status trumps the Minister of Interior's licensing factor.
(VIDEO OF BLACKWATER EMPLOYEES WORKING IN IRAQ)
RAMAN (voice-over): Sunday's shooting in the Sunni-dominated area of western Baghdad happened when State Department officials being protected by a Blackwater convoy like this one were fired upon by gunmen. So far, few details of the shootout have been released.
But Andress says private security contractors in Iraq are essential.
ANDRESS: What we primarily do, most of us, is protect convoys, protect sites where reconstruction is being undertaken to.
RAMAN: Over the past four years, there have been several violent incidents involving Western security contractors. But this is the first time the government has reacted so severely.
ANDRESS: This is a natural collision here that was going to take place.
(VIDEO OF BLACKWATER EMPLOYEES WORKING IN IRAQ)
RAMAN: And it forces a debate that's been brewing for years over what rules private security contractors must follow and for what purposes they should be used.
Aneesh Raman, CNN, Baghdad.
(END VIDEOTAPE)
LEMON: A simple image packed with meaning caught our eye as we scanned pictures from the Associated Press. An American flag carefully folded by white-gloved hands over a simple wooden coffin. The story behind this image is that of a fallen hero and a family's sacrifice.
(BEGIN VIDEO TAPE)
LEMON (voice-over): On September 7, Army Specialist Jason Jay Hernandez turned 21. On the same day, a roadside bomb killed him in Mosul, Iraq. On Friday at the high school football game in Streetsboro, Ohio, a special salute for Specialist Hernandez, who graduated in 2005, a moment that overwhelmed his younger brother, Aaron, who served as honorary team captain that night and needed a hug from dad.
On Monday in Streetsboro, friends cried. A horse-drawn carriage took his body to the cemetery. Townspeople saluted the young soldier. A military honor guard handed his wife, Alicia, the carefully folded flag -- a widow too young at 20.
His father, John, an Army recruiter, tenderly touches Jason's coffin. A family says their final good-byes.
(END VIDEO TAPE)
LEMON: Jason Hernandez was one of three soldiers killed by that roadside bomb in Mosul. Sergeant Lee C. Wilson, age 30, was from Chapel Hill, North Carolina. We're sorry we couldn't find a photo. His father says Wilson was on his fourth deployment and scheduled to come home in December. Army Specialist Thomas L. Hilbert also died that day. He was 20 years old from Venus, Texas.
These are just three of the 3,787 American servicemen and women who have died in the Iraq War.
(COMMERCIAL BREAK)
LEMON: We're going to introduce you to our CNN Hero in a moment.
But first, you see we're looking at the Cap done. The reason -- we've got some news on mortgages, very important news. If you own a house, you're thinking of selling a home, if you have an ARM or any type of mortgage, the House, just a little while ago, approved a plan to expand federal backing of mortgages in hopes of helping struggling homeowners avoid foreclosure. This bill, which passed the House, by the way, 348-72, would allow the Federal Housing Administration, which ensures mortgages for low and middle income borrowers, to back refinanced loans for tens of thousands of borrowers who are delinquent on payments because their mortgages are -- they're resetting to sharply higher rates from low initial teaser levels. Of course, all of this coming on the day when the Fed's dropped the rate for the first time in four years. And you can see that the markets, the Dow, rallying.
The lower right hand corner of your screen there, we're going to leave that up for you until we get to the closing bell, coming up, oh, Betty, about 18 minutes from now?
NGUYEN: Yes. About that.
LEMON: Susan Lisovicz will take you there.
NGUYEN: Right now, though, we want to introduce you to a young man who has dedicated his life to some of the world's neediest children in one of the poorest countries -- Haiti.
Aaron Jackson is today's CNN Hero.
(BEGIN VIDEOTAPE)
AARON JACKSON, CNN HERO: Haiti is the most water poor country in the world. It's probably the most environmentally destroyed country in the world. In Haiti, people get their water sometimes from puddles, streams. I've seen kids playing in sewage and also drinking from the same water.
Haiti not having proper sanitation, a lot of people are infected with intestinal parasites. (BEGIN GRAPHIC)
It is estimated that half of Haiti's 8 million residents live with internal parasites.... And in some areas, worms infect more than 40 percent of the children.
(END GRAPHIC)
JACKSON: When you see a child with an extended belly, that's intestinal worms. The average worms eats up to about 20 percent of a child's nutritional intake a day.
This is the difference between life and death in a lot of situations.
My name is Aaron Jackson and it's my goal to de-worm the entire world.
I grew up in Destin, Florida, playing golf every day of my life. I decided to travel and when I traveled, it really opened my eyes to what the world was really like.
In Haiti, we have four orphanages, an intestinal parasite program and also medical clinics.
When we show up to a community to de-worm, we educate the people on ways to prevent to get worms again -- washing the vegetables, cooking the meat a little longer, wearing shoes when you go outside are ways to help prevent catching the worms.
When we first go into an orphanage and we de-worm them, the children look very zombie like, no livelihood in their face.
And that's the scary thing, because you have to tell kids that tonight, the worms will be leaving your body in some shape or form. And then after we de-worm, they come back to life. Literally within weeks you can see that they're playing again and smiling.
For a pack of cigarettes, you can de-worm 250 children -- a whole school.
UNIDENTIFIED MALE: Aaron is a great person and I'm so blessed to know him and work together with him. Investing in children is investing in a country and that really makes things different in the future.
(BEGIN GRAPHIC)
By the end of 2007, Aaron's organization will have helped to de- worm about 1.7 million people worldwide.
(END GRAPHIC)
JACKSON: Well, me and the children, we've become like family, you know?
They call me Papa Jackson. These kids are my kids.
(END VIDEO TAPE)
NGUYEN: What a wonderful story.
And you can go to CNN.com/heroes to see Aaron Jackson in the streets of Port-au-Prince visiting one of his orphanages. And while you're there, you can also nominate a hero of your own. Keep in mind, though, winners will be honored during a special broadcast on December 6.
LEMON: Three of six devices used to monitor dangerous winds weren't working when a plane smashed into the tarmac in Phuket, Thailand. The pilots were still warned of wind sheer concerns. Eighty- nine people, including five Americans, were killed in Sunday's crash. Some survivors blame it on the weather.
Christopher Marken was seated at the plane's emergency exit when the plane skidded off of the runway and burst into flames.
Earlier, he spoke with us by phone.
(BEGIN VIDEO TAPE)
LEMON: Take us back, if you will, Christopher, to when you're on the plane.
Did you experience any turbulence at all before this?
CHRISTOPHER MARKEN, PLANE CRASH SURVIVOR: Yes, we experienced some turbulence, but not as much as you would expect. We also experienced -- the pilot did a lot of adjustments with engine to adjust the flight plan in flight. And we heard the landing gear coming up. And the pilot gave full throttle. And just a couple of seconds later, we smashed into the ground.
LEMON: You just smashed right into the ground?
MARKEN: Yes. There was no warning from the pilot, no warning at all.
LEMON: No screaming or anything on the plane, people going oh, my gosh?
MARKEN: No, it was too fast. Not until after the crash itself.
(END VIDEO TAPE)
LEMON: Well, dozens of victims' relatives are still trying to identify the next of kin.
NGUYEN: The New York Knicks coach in trouble for foul language. Yes, a former team executive accuses Isiah Thomas of sexual harassment. We get the latest ahead in THE NEWSROOM.
(COMMERCIAL BREAK) NGUYEN: A last minute guilty plea in a bizarre kidnapping. Vincent Filyaw may spend the rest of his life behind bars. Today, just moments before his trial was set to begin, Filyaw pleaded guilty to kidnapping and raping a teenager in an underground bunker in South Carolina. Filyaw faces up to 30 years in prison for each of the 10 days he held the girl captive.
Now, CNN affiliate WLTX says Filyaw sent them a manuscript of his plans and he writes about stalking his victim and admiring her ingenuity. The girl text messaged her mother and police then came to rescue her.
LEMON: There's a surprise on Capitol Hill today. Senator Larry Craig was back on the job. The Idaho Republican, who is trying to undo his guilty plea on charges related to a sex sting, showed up for work this morning. It's apparently his first day back since the scandal broke.
Craig spoke briefly with CNN Congressional producer Ted Barrett.
(BEGIN VIDEO TAPE)
TED BARRETT, CNN CONGRESSIONAL PRODUCER: What brings you back to the Capitol today?
SEN. LARRY CRAIG (R), IDAHO: Go to work.
BARRETT: Are you intending to vote today, sir?
CRAIG: Well, that's my plan.
BARRETT: OK.
Why did you...
CRAIG: Good morning.
Good morning.
BARRETT: Why did you decide to come back today?
CRAIG: Because I am a serving United States Senator from Idaho.
BARRETT: And how are you how are you doing...
(CROSSTALK)
BARRETT: How are you doing in light of this scandal and everything else?
(END VIDEO CLIP)
LEMON: Also, today, the American Civil Liberties Union filed a brief in Minnesota calling Craig's bathroom bust unconstitutional. When the case became public, Craig announced his plan to resign at the end of this month. But days later, he said he'll try to overturn his guilty plea and keep his Senate seat.
NGUYEN: Well, damaging testimony from a former employee of the New York Knicks in the sexual harassment suit against Knicks coach, Isiah Thomas. A friend of the former Knicks executive, who filed the suit, said the woman had complained to her that Thomas berated her with foul language and called her a derogatory name.
Now, in a video deposition shown in court today, the Knicks coach owned up to a linguistic double standard, if you will.
An update now from reporter Thalia Patillo of CNN affiliate WPIX.
(BEGIN VIDEO TAPE)
ISIAH THOMAS, NEW YORK KNICKS COACH: A white male calling a black female a (EXPLETIVE DELETED) is highly offensive.
UNIDENTIFIED MALE: Would you find it also offensive for a black male to call a black woman a (EXPLETIVE DELETED)?
THOMAS: Not as much.
THALIA PATILLO, WPIX CORRESPONDENT (voice-over): It was on the big screen for jurors and the courtroom to hear -- testimony from the pre-recorded disposition. During the 15 minute video, Knicks president and coach Isiah Thomas denied he ever called Anucha Browne-Sanders the "B" word, as she alleges he repeatedly did during business meetings.
The former Knicks executive is suing Thomas and Madison Square Garden for $10 million. She says she was fired for accusing the Knicks coach of harassment.
THOMAS: Please don't mischaracterize the video that was shown in court today. I don't think it's right for any man to ever call a woman a (EXPLETIVE DELETED). I didn't do it and I wouldn't do it.
PATILLO: Sports fans say the video is damaging.
UNIDENTIFIED MALE: I really think that if he said those words, he's got a serious problem.
UNIDENTIFIED MALE: That's ridiculous. It's -- there is no distinction. It's a term that is offensive to women.
UNIDENTIFIED FEMALE: Young people look at him as a role model. And I have a son. And he goes out and get a female and he gets angry with that female -- should he use that word to her?
PATILLO: The video followed testimony from a witness who claims he saw Thomas put his arm around Browne-Sanders during an open practice game and saw her uncomfortably pull away from him.
(END VIDEO TAPE)
NGUYEN: That trial is expected to last several more weeks, meaning a verdict could come down just as the Knicks are getting ready for training camp.
LEMON: Well, much has been reported about a 2005 alleged massacre in Haditha. We have some movement on that story now.
Details now from CNN's Jamie McIntyre, who joins us, our senior Pentagon correspondent -- what do you have for us -- Jamie?
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Don, you know, that some of the Marines who were involved in that incident were charged with murder in the case. The deaths of those civilians in Haditha, Iraq in November of 2005. So far, no one has been convicted of those charges.
But in addition, some higher-ups were charged, not with such serious offenses, but with dereliction of duty to properly follow up, investigate and report on what happened on Haditha on that November day.
Today we learned that Captain Lucas McConnell, who was the company commander who had been charged last year with dereliction of duty, has been cleared of any criminal wrongdoing. The charges against him have been dropped by the commanding general who has been overseeing these cases. He's been given a grant of immunity to further the investigation.
But basically, General James -- Lieutenant General James Mattis has decided that in the case of Captain Lucas McConnell that any omissions or errors that he made did not rise to the level of any criminal activity. He'll be dealt with administratively, but will not face any criminal charges.
And, Don, what this means is that despite all of the high profile reporting on what happened in Haditha and all the investigations, so far no one has been convicted of any criminal activity in connection with the case. Of the four Marines who were charged of murder, two had the charges dropped. One was given immunity. And only Sergeant Frank Wuterich is still facing a possible conviction on some more serious offense -- Don.
LEMON: Senior Pentagon correspondent Jamie McIntyre.
And we'll continue to follow it.
Thank you.
NGUYEN: Check your watch because the closing bell and a wrap of the action on Wall Street is straight ahead don't go anywhere.
(COMMERCIAL BREAK)
LEMON: A busy day for us.
It's going to be busy for Wolf Blitzer.
NGUYEN: Oh, yes. He is standing by now, live in "THE SITUATION ROOM" to tell us what is coming up -- hi there, Wolf. WOLF BLITZER, HOST, "THE SITUATION ROOM": Hi, guys.
Thanks very much.
He's never at a loss for words and is always able to find humor in the most serious issues of the day. The talk show host Bill Maher is standing by to join us live right here in "THE SITUATION ROOM".
An uproar at the University of Florida over this -- a student tasered then arrested during a speech by Senator John Kerry. Fellow students say the police simply went too far. Our John Zarrella is on the scene. He'll join us with a live report.
And presidential candidates and members of Congress, they're now forced to shell out more money to travel in style. We're going to tell you why.
All those stories, guys, coming up right here in "THE SITUATION ROOM".
LEMON: Now, that's a teaser.
NGUYEN: Yes.
LEMON: You never know what Bill Maher is going to say.
I'll be watching that.
All right, Wolf, thank you.
NGUYEN: And you may want to be watching this, because the closing bell is about to ring following a huge day on Wall Street.
LEMON: Susan Lisovicz, take a deep breath and take it away. Man, oh man.
(STOCK MARKET REPORT)
NGUYEN: Now let's go to "THE SITUATION ROOM" and Wolf Blitzer.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxant.com
