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Preventable Staph Death?; Beach House Fire; Militias Take Larger, Deadlier Role on the Streets of Iraq; Remembering Fire Victims; Gap & Sweatshops; Romney on a Roll; Noel to Hit U.S.?; Gas Prices

Aired October 30, 2007 - 11:00   ET

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

T.J. HOLMES, CNN ANCHOR: Want to get on to this story about Blackwater. New outrage this morning over last month's deadly shooting of Iraqi civilians.
Sources familiar with this case say the State Department has promised limited immunity to some of the Blackwater bodyguards that were involved. However, a senior State Department official now tells CNN that no such deal was offered.

You may remember the U.S. contractor says its workers came under attack in Baghdad and returned fire in self-defense. Seventeen Iraqi civilians were killed, dozens more wounded. Iraqi authorities have called the killings "premeditated murder."

The FBI has been investigating the shooting and has refused to comment on the immunity reports, but a short time ago we learned that Iraq's parliament now being stirred to action. They're drafting a new law that would require security companies there to obey Iraqi laws with no possible immunity.

Our State Department correspondent Zain Verjee is on top of this story. She will join us in a short time here in the NEWSROOM.

And we also often hear a lot about Blackwater. Been hearing certainly a lot about it in the past couple of weeks and months.

Let's take a closer look now at Blackwater USA.

It's a North Carolina-based contractor. It has about 1,000 armed men in Iraq. They performed duties once reserved for soldiers, such as guarding convoys, protecting officials. Since 2001, Blackwater has won more than a billion dollars in contracts from the U.S. government. Contractors can make more than $30,000 in a single month.

To this story now out of New York. A 12-year-old boy there with a drug-resistant staph infection. Did he really have to die, though? His family says the hospital is to blame.

CNN's Allan Chernoff joins us now live with the developments.

Allan, we know you were listening in to that press conference from the boy's mother and her attorneys. What did we get out of that?

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: T.J., just an incredibly tragic story. Twelve-year-old Omar Rivera died two weeks ago from the MRSA superbug. Her mother says that she is going to sue the hospital where he was treated. He was treated at the emergency room of Kings County Hospital, which is a city-owned hospital here in New York City.

She sayses she brought Omar to the E.R. and he was treated as if he was having an allergic reaction to some medicine. He was sent home with Benadryl instead of being treated for a fatal infection.

She spoke of her pain just a few moments ago.

(BEGIN VIDEO CLIP)

AILEEN RIVERA, OMAR RIVERA'S MOTHER: I don't want anybody to suffer like my son. I take my son to the hospital. They don't do nothing.

My son don't have no disease. My son don't have no infection. I want to respect my son's memory, my family, and me.

(END VIDEO CLIP)

CHERNOFF: The attorneys say this is a clear case of malpractice. They are suing the city hospital for $25 million.

Kings County Hospital did put out a statement saying, "We will be closely examining whether more could have been done to detect the infection at that time."

Now, as you know, there have been a growing number of reports of MRSA spreading in schools. Traditionally, this has really been an infection that people have caught in hospitals.

Now, the suspicious is that Omar did catch it at his intermediate school in Brooklyn. Ironically, his mom actually works for the Department of Education at a high school in the Bronx. She says that she is totally healthy -- T.J.

HOLMES: It is such a sad story and some scary stuff, this MRSA infection.

Allan Chernoff on the scene and on the story for us there.

Allan, thank you so much.

And folks, you know, we have been hearing a lot about this germ, this MRSA, in recent weeks, but actually it's nothing new. An estimated 90,000 Americans get the most dangerous form of it every single year. Most cases are relatively mild, but it can, as we know, become deadly.

MRSA is resistant to many penicillin antibiotics but can often be treated with other drugs. It used to be found mostly in hospitals, as you heard Allan there talking about. The cases are also appearing in schools, gyms and elsewhere.

Well, searching for a so-called superbug, Loyola University Medical Center near Chicago plans to screen every single patient for the staph germ known as MRSA. Under state law, hospitals already must screen patients who are considered high risk or are in intensive care. A handful of other hospitals in Illinois do standard screening, as well. Those who test positive will be isolated.

Well, to North Carolina now. Frantic 911 calls from witnesses to a tragedy. This morning, we're hearing from people who saw that beach house on fire and tried to save lives.

Our Alina Cho has the story.

(BEGIN VIDEOTAPE)

ALINA CHO, CNN CORRESPONDENT: No definitive word on a cause yet. It could be up to a month before we know for sure, but there are several published reports this morning that the fire may have started in the back of the house. Possibly on the back deck.

Fire officials do not suspect foul play. They do believe it was an accident.

Also, for the first time, we're hearing those frantic 911 calls alerting authorities the house on North Carolina's coast was on fire.

DISPATCHER: 911, what is your emergency?

CALLER: Yes, I'm out on the beach. A man is screaming and jumped out the window of a house and is totally engulfed in flames.

DISPATCHER: OK, we've got people on the way. Thank you.

CHO: The fire broke out early Sunday morning. The kids were there for a weekend getaway. It was supposed to be a weekend of fun. Seven students died. The father of one of the victims spoke to CNN affiliate WKYC.

TERRY WALDEN, DAUGHTER DIED IN FIRE: We've really come to grips with the fact that she's not coming back. That is going to be the hardest part.

CHO: That was Terry Walden. He lost his daughter Allison in the fire. She was a 19-year-old sophomore at the University of South Carolina.

Six students miraculously survived. Funerals are being planned for this weekend. And grief counselors are on hand to help the thousands of students at two universities deal with this tragedy.

Alina Cho, CNN, New York.

(END VIDEOTAPE)

HOLMES: Surviving that tragedy and living to tell about it. This morning, a young student who made it through the fatal beach house fire is talking about how he got out alive.

(BEGIN VIDEO CLIP)

FREDERICK "TRIP" WYLIE, FIRE SURVIVOR: I pulled the blinds off the window and kind of just kicked in the window. And I mean, I was -- the only option, you know, you really had, as to, you know, jump out.

(END VIDEO CLIP)

HOLMES: Well, the owner of the house who burned, whose daughter actually survived, says simply this: "We are living a nightmare."

To this story now out of Minnesota. Charges expected this morning in the death of a woman who answered a Craigslist ad.

Minnesota police tell CNN the suspect is 19 years old and has no history of violence. They say also that he lives just blocks from where they found the body of Katherine Olson. Police believe he placed that nanny ad. Still no word on a motive here. Police are working closely with Craigslist.

Hundreds are expected to attend a funeral for Olson tomorrow.

(WEATHER REPORT)

HOLMES: We need to take you back out to this story happening out in California. A big rig accident, as you see there.

We do know now that the driver of this big rig was killed in this crash. What happened here some hours ago, that this big rig crashed into the center median.

This is at I-405. Very important freeway out there in California, in the Los Angeles area. But the trucker was killed in this accident.

It happened around 5:00 a.m., but traffic was backed up in both directions for miles several, several hours. And still at this point, because of this accident, apparently the driver was pinned inside of this flaming cab of the truck.

Authorities say once it slammed into the median there it burst into flames. You can see on the back bed there kind of the truck it was hauling a crane.

Not exactly sure what was going on with him at the time, with the driver at the time to cause the accident in the first place. But we do know that the driver has been killed in this accident and it is still causing quite a traffic mess out there in the Los Angeles area.

We'll keep an eye on this story, getting more details we will pass along to you as it warrants.

Moving on here now.

Child workers, clothes, and a big controversy for an American clothing giant. (COMMERCIAL BREAK)

HOLMES: Who's in charge in Iraq? Militia controlling the streets heightening fears among civilians.

CNN's Jim Clancy takes a look for us.

(BEGIN VIDEOTAPE)

JIM CLANCY, CNN INTERNATIONAL CORRESPONDENT (voice over): A fiery end for a pair of al Qaeda's foreign fighters at the hands of Sunni militiamen. The Iraqi police are present, yes. In control, hardly.

"We are in a terrorist area," says the man in a baseball cap. "We are the sons of the awakening. We killed two terrorists and we arrested a few others."

A Sunni militiaman admits one of them was executed as he held up his hans to surrender. Nearby, militiamen hold the fate of others in their trigger fingers.

In Baghdad, a tea shop owner warns you can't trust anyone, saying here, "Shia Mehdi army snipers shoot at residents."

Iraq's militia problem is complex. Some are based on religious loyalties. Others are tribal. There are pro-Iranian factions and criminal, kidnap and extortion gangs.

They have killed Sunni, Shia, Christians and Kurds, alike. And they have driven hundreds of thousands from their home. Some Sunni leaders contend by day Iraq's police wear their national uniforms, by night some work with pro-Iranian militias.

TARIQ AL-HASHEMI, IRAQI VICE PRESIDENT: We have a militia that is already penetrating the Iraqi national armed forces. These militia have to be (INAUDIBLE).

CLANCY: Prime Minister Nuri al-Maliki's Shia alliance filled the rank of police with its own supporters. Sunnis joined the resistance, often fighting alongside al Qaeda. Now with Sunnis turning on al Qaeda, the U.S. has put nearly 70,000 so-called concerned local citizens on a temporary payroll, arming and training Sunnis to integrate into the national police.

GEN. DAVID PETRAEUS, COMMANDER, MULTINATIONAL FORCE, IRAQ: We're not creating more militias. We're not arming tribes. We're not -- certainly not trying to create problems for the future.

CLANCY: But Iraq's Shia-led government is unenthusiastic, dragging its feet, in the words of one U.S. source. Taking in Sunni volunteers would mean far fewer jobs and salaries for its own supporters. Promises to balance the national police have stalled, and displaced Sunnis are frustrated.

UNIDENTIFIED MALE: So we held this toward just a few months ago. There was no change.

CLANCY: Twenty-five families, this man says, can't go back to their homes because Shia militiamen control his village. Earlier this year, 5,500 police in Diyala province were fired, most only names on the books to collect salaries. Almost all had been hired from the Shia stronghold of Sadr City in Baghdad.

"Some police here are just militiamen in uniforms," says this Sunni volunteer. "Killing and kidnapping."

The police chief says the complaints are exaggerated. He says he's waiting for the government in Baghdad to approve hiring more Sunnis for the force.

The U.S. military charges some Shia militias get sophisticated arms from Iran. Posters in the capital show the names and faces of Sunni victims openly blaming the government for supporting pro-Iranian militias. Government officials deny it.

MOWAFFAK RUBAIE, NATIONAL SECURITY ADVISER: We don't need militia. And militia now, I'm pleased to say, it's a dirty word in the streets of Baghdad and in Iraq. And it's not acceptable.

CLANCY: Muqtada al-Sadr ordered his Mehdi army militia to stand down in August as criminals filled the ranks extorting his own Shia supporters and battling rivals for turf.

(on camera): Iraqis weary of sectarian strife argue all of the militias are out of control. Some hope that just as al Qaeda lost its support, the militias, too, will see their safe havens disappear whether they are in sectarian strongholds or the government.

Jim Clancy, CNN, Baghdad.

(END VIDEOTAPE)

HOLMES: A new controversy this morning over Blackwater bodyguards in Iraq. Iraq says the U.S. contractors gunned down civilians in cold blood. Allegations Blackwater denies.

Late this morning, conflicting reports about whether the State Department has promised limited immunity.

CNN State Department Correspondent Zain Verjee "Keeping Them Honest."

All right, Zain. Help us clear up this mess now.

Who is it that is said to have granted this so-called immunity?

ZAIN VERJEE, CNN STATE DEPT. CORRESPONDENT: Well, according to U.S. Officials, the State Department's diplomatic security investigators granted the immunity. Now, diplomatic security is kind of like the law enforcement arm of the State Department.

Now, the limited use immunity legally means that they promised Blackwater guards that they would not be criminally charged for anything, they said, as long as the statements were true. Now, it's not clear when it was done or how exactly it was explained to the guards, but a senior State Department official told CNN that diplomatic security has the authority under case law that says government employees' statement will not be used against them in a criminal proceeding. And that was the authority they were acting under.

Now, the Justice Department, for its part, says, well, you know, federal prosecutors at least need to be consulted before a decision like that is made. So there are some differences and it may gear up to be a battle between State and Justice.

HOLMES: All right. What's State's official stance today? Where are they on it now?

VERJEE : Well, publicly, the State Department saying very little, only that it wasn't sanctioned or consulted by senior management in Washington. But privately, two senior State Department officials not authorized to speak on the record tell CNN that diplomatic security did not offer blanket immunity to Blackwater guards, but their understanding is really only that it will be limited immunity.

HOLMES: All right, limited immunity. I guess we're kind of all over the place, still. So I guess we don't exactly know what it means as far as whether or not these guards will be prosecuted.

VERJEE: Well, U.S. officials say that it does not mean that they will never be prosecuted under this deal. They just need to find some evidence in order to be able to do that. The State Department official, too, acknowledged that what it does, though, it makes it much more complicated for investigators and the FBI team down there to get the kind of information they need to build a prosecutorial case.

HOLMES: All right. Zain Verjee "Keeping Them Honest" and keeping us straight.

We appreciate it and we're glad we've got you, Zain. Thank you so much.

Well, some things coming up on the calendar. Not just Halloween. Flu season is upon us. Do you need a flu shot?

CNN's Elizabeth Cohen tells us who is not getting them and who should be.

(COMMERCIAL BREAK)

HOLMES: Flu season is upon us, and it turns out a number of people who need flu shots the most will not be getting them. Are you one of them?

CNN Medical Correspondent Elizabeth Cohen talked about this earlier with our Heidi Collins.

(BEGIN VIDEOTAPE) ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: There's a new study that says that 25 percent of elderly people with cancer aren't getting a flu shot, and they ought to be getting one because, well, they're elderly and they have cancer. There are other studies that show that fewer than 30 percent, less than 30 percent of kids, are getting flu shots. And kids definitely under a certain age need a flu shot.

So let's go through the master list of everyone who ought to be getting a flu shot.

Anyone who's elderly. And in flu shot terms, that means over age 50. Children ages 6 months to 5 years old and their siblings ought to be getting flu shots.

And pregnant women. And that's a surprise. Even some obstetricians don't know that pregnant women ought to get flu shots. And people with chronic diseases like cancer and diabetes.

Now, even if you're not on this list you can get a flu shot. For example, if you go visit grandma every weekend and she's old and frail, you want to get one to protect her.

HEIDI COLLINS, CNN ANCHOR: Yes.

COHEN: I mean, forget about you. You want to get one so that you don't get her sick.

COLLINS: Sure. Sure. Well, that makes sense. But I think some of the reason why people don't get them is because they're afraid that they're going to get sick from the shot.

Does that really happen?

COHEN: It doesn't happen. The Centers for Disease Control is extremely clear.

They say that we know there's this urban myth out there that getting the shot gets you sick. They say it is not true, the shot cannot get you sick. And they say it over and over again, but still, that myth is out there.

COLLINS: OK. Well, I'm glad that you cleared that up, because I wasn't really sure myself.

COHEN: OK.

COLLINS: CNN Medical Correspondent Elizabeth Cohen.

Thank you.

COHEN: Thanks.

(END VIDEOTAPE)

HOLMES: And to get your "Daily Dose" of health news online, log on to our Web site, and you'll find the latest medical news, a health library, and information on diet and fitness. The address, CNN.com/health.

Romney on a roll, using his time and money to build a lead. But will his early popularity equal votes when it really counts?

(COMMERCIAL BREAK)

HOLMES: And hello again to you, everybody. I'm T.J. Holmes, sitting in today for Tony Harris and Heidi Collins.

Up first this half hour, a 12-year-old New York boy dies of the multiresistant superbug. His family says his death could have been prevented.

Omar Rivera's mother announced she is taking the first step towards suing New York City and the hospital system for $25 million. She says Kings County Hospital gave her son allergy medicine and sent him home two days before he died.

(BEGIN VIDEO CLIP)

RIVERA: I don't want nobody to suffer like my son. I take my son to the hospital, they didn't do nothing.

My son don't have no disease. My son don't have no infection. I want to respect my son's memory, my family and me.

(END VIDEO CLIP)

HOLMES: A spokeswoman for Kings County Hospital says the boy did not show signs of a staph infection when he was treated. She says the hospital will be taking a close look at whether more could have been done.

Well, frantic 911 calls from witnesses to this tragedy. This morning we're hearing from people who saw the North Carolina beach house on fire and tried to save lives.

Listen to this.

(BEGIN AUDIO CLIP)

DISPATCHER: Brunswick County 911, what is your emergency?

CALLER: Yes, ma'am, there's a house fire.

DISPATCHER: Yes, sir. Are you the one that I talked to?

CALLER: Yes, ma'am.

DISPATCHER: You said it was Scotland, right?

CALLER: Number one Scotland Street.

DISPATCHER: Yes, we got -- we've got help on the way sir. You said that there were people inside the house?

CALLER: Yes, ma'am. That is correct.

DISPATCHER: Are they still inside?

CALLER: I think so.

DISPATCHER: OK. You don't know how many people or anything?

CALLER: I do not.

DISPATCHER: All right. Well, we've got the fire department on the way, OK? How bad is it?

T.J. HOLMES, CNN ANCHOR: Today family and friends are mourning the seven college student who died in the fire. Those victims being honored in Washington. Take a listen to this from the House of Representatives.

REP. JAMES CLYBURN (D), SOUTH CAROLINA: It's with a heavy heart that I rise to memorialize the lives of Justin Anderson, Travis Kale, Laurenman Mann, William Ray, Allison Walden, all students of the University of South Carolina of which I proudly represent here in this body, and Emily Yelsen, a student of Clemson University.

HOLMES: Lawmakers pause for a moment of silence in honor of the students who died in that fire.

Well, a sweatshop and young children working as virtual slaves. An American clothing giant under fire; the Gap now dealing with the fall-out and vowing to make it right.

Keeping them honest CNN's Alina Cho has the story.

ALINA CHO, CNN CORREPSONDENT: 10-year-old Amitash (ph) has been robbed of his childhood. One of many children working 16-hour days at this sweatshop in India as reported by the journalist Dan McDougall in the British newspaper, "The Observer." In these photos, Amitash (ph) is doing intricate embroidery on blouses for children under a brand name most people know, the Gap.

DAN MCDOUGALL, THE OBSERVER: One of the floors had there was excrement on the floor. It was running down the gutters and there was quite a smell.

CHO: The photos tell the story. The children McDougal said slept on the roof. This child doing bead work loose younger than ten. He says they come from poor villages, to India's capital New Delhi, crammed on to train nicknamed the child labor express.

MCDOUGALL: The parents, they sell the children for as low as $22 with the promise more money will come.

CHO: According to Save The Children there are 80 million child laborers in India, why it is often called the child labor capital of the world.

GEOFFERY KEELE, UNICEF: The conditions some of these children work in are quite squalor and very severe.

CHO: The filthy factories in India are a far cry from the pristine stores on New York's Fifth Avenue. The blouses made at the sweatshop were supposed to end up at Gap kid stores. The Gap says they have been destroyed.

MARKA HANSEN, PRES. GAP NORTH AMERICA: It's deeply disturbing to all of us. I feel violated and I feel very, very upset and angry.

CHO: The Gap says it Indian vendor farmed out the work to a sub contractor that was not approve bid the company. And though the Gap takes full responsibility, some argue consumers share the blame.

MCDOUGALL: The craze for cheap clothing in America and in the U.K. right now is leading to more and more contracts. It's like a vicious circle. In tend it's a self-fulfilling prophecy.

CHO: McDougall says the factory were these children worked was raided but no one knows how many other sweatshops exist with children like Amitash (ph) working like slaves for customers and companies a world away.

Alina Cho, CNN, New York.

HOLMES: We invited the president of Gap, Marka Hansen, to join us this morning, that request was declined.

Mitt Romney making the most of his early successes but time may not be on his side. More now from CNN's senior political analyst Bill Schneider part of the best political team on TV.

(BEGIN VIDEO CLIP)

BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Mitt Romney is having a good day. He won the endorsement of Judd Gregg, New Hampshire's popular senator and former governor.

SEN. JUDD GREGG (R), NEW HAMPSHIRE: Somebody else said I was going to endorse a former governor of Massachusetts for president of the United States, I'd say, well, I didn't think the red sox were going to win the world series twice in my lifetime either.

SCHNEIDER: Meanwhile in Iowa Romney's numbers keep climbing. He's at 36 percent in a new Iowa poll, up eight points since August. Why is Romney doing so well in Iowa? Two words time and money.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I have had to spend a lot of time and a lot of money here, of course, people didn't know me.

SCHNEIDER: Spent more than $2.5 million on TV ads in Iowa. No other candidate comes close. And time?

ROMNEY: I probably spent more time here than anybody. I have been in 57 counties.

SCHNEIDER: Romney better known in New Hampshire where he was the governor of neighboring Massachusetts. The latest poll does show Romney winning New Hampshire, too. Republicans in Iowa, New Hampshire have gotten to know Romney. But Romney is less well known nationally. Our October poll of polls shows Romney running fourth among republicans snags wide. Romney is counting on wins in Iowa and New Hampshire to give him national momentum.

The question is, will there be time? Next year big states like Florida, New York, and California will be voting early. And Romney's facing very prominent national competitors. Keep in mind that Iowa is a difficult state to poll because it's a caucus state. It's hard to predict who is going to show up an even long meeting on a cold winter's night two days after New Year's. Bill Schneider, CNN, Washington.

(END VIDEO CLIP)

HOLMES: If you want the most up to the minute political news anywhere available, CNNpolitics.com is your one stop shop. Details and see why it's the internet's premier destination for political news. That's CNNpolitics.com.

Your hurricane headquarters and we got a doozy right now we're talking about Noel is the name. Noel is causing some travel issues.

JACQUI JERAS, CNN METEOROLOGIST: It certainly is. The storm may be here over Cuba right now but look at how it is blasting the central Bahamas. We're getting word out of Miami international airport that some flights from Miami to the Bahamas have been cancelled as a result of Noel. NASA and Freeport up to the north not being impacted yet but they are getting ready ahead of the storm. Some of the airlines affected include American, American Eagle and Bahamas Air. Make sure you contact your carrier directly to find out whether or not your flight has been cancelled.

We also hear from the cruise industry both Royal Caribbean and also Carnival Cruise Lines are reporting they are diverting some of the expected travels. All of the cruises expected to be running on time, just possibly moving around a little bit due to the storm.

It's moving off to the west right now and it's expected to start to pull on up towards it north and until we start to see that pull, we will get increasingly concerned that Florida is going to have a greater impact on this storm.

You can see the forecast here and I want to point out this is Wednesday night into Thursday morning. When it would be at its closest approach. The forecast brings it very near or over the island and heading off to the east of Freeport. We think either way we still could see some showers and thunderstorms, rough surf and beach erosion across southern parts of Florida. Of course unfortunately you're already seeing that due to the strong north easterly winds.

This is also a radar picture I wanted to show you I got off the internet from the Cuban government. See the feeder bands developing. Here we have the islands and they are already starting to get some of those heavy rain showers. We don't expect the same kind of flooding event here across the Bahamas that we saw over the Dominican Republic and a lot of that has to do with elevation, T.J., up to 10,000 feet with all the mountains over Hispaniola that causes mud slides and a lot of flash flooding. The Bahama Islands are still very flat but still we could see 5 to 10 inches of rainfall.

HOLMES: Certainly a mess for the flights catching the flights to the Bahamas. I know they had some special trips planned. Jacqui, we appreciate you, though.

Well, folks, how bad do you really want to see your family this holiday season? That trip home to see them could cost you a bit more.

UNIDENTIFIED MALE: We think around Thanksgiving we will see prices start to go up somewhat.

HOLMES: That sounds like the standard thing this time of year. Gas prices expected to go up. How high? How long. Those details straight ahead.

(COMMERCIAL BREAK)

HOLMES: Veterans affairs in the headlines this morning. We just learned President Bush will nominate Dr. James Peake to head up the VA. Peake here is a retired army general. He has been the lead commander in various medical posts including U.S. army surgeon general. If confirmed, he will be in charge of the government's second largest agency.

You know how this goes by now, oil prices go up and gas prices follow but when and how much.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Oil prices hit a new record $93 a barrel but gas prices haven't gone up as much. People are wondering when it's going to hit their pocket books. In the energy market oil prices are spiking, at the pump little change. Gas prices are up a penny this month, down from May. But experts say that higher oil prices will likely lead to higher gas prices. Increasing the risk of higher prices across the economy.

FADEL GHEIT, OIL ANALYST, OPPENHEIMER & CO.: We are going to see rising prices. Rising food prices, rising transportation costs, costs of airline, gasoline, all these, but the biggest impact is going to be immediate and basically going to be home heating bills.

WILLIS: A spike at the pump could happen in just three weeks.

ROBERT SINCLAIR, JR.: Usually when demand's up, price goes up. So we think around Thanksgiving we will see prices start to go up somewhat. WILLIS: If oil prices remain at $90 a barrel by next spring, gas prices will rise to a record $3.50 a gallon. That will coincide with another blow the economy is taking, less consumer spending because of the housing crisis. Those two factors together will drag down the economy and possibly push it into recession.

GHEIT: Higher oil prices can be tolerated by the economy to certain extent. But not forever. Eventually, the economy is going to get derail bid higher oil prices. The question is not if, it's when.

WILLIS: You can fight back against higher gas prices even if you don't own the slickest new hybrid buy energy conserving motor oil and really does improve mileage by making the engine part more slippery. That means it takes less energy. Watch out for gadgets that claim to save you on gas, magnets, well they are all a lot of hooey and don't improve your gas mileage. One easy change that can save you money. Slow down. Don't speed up to traffic lights and don't drive above the speed limits on highways.

HOLMES: Something else for you drivers to think about. Analysts say an expected interest rate cut tomorrow to send oil prices even higher. Well it's being called the most significant consumer safety legislation in a generation but it took millions of recalled products to do it. Susan Lisovicz at the New York Stock Exchange with the details here for us.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, T.J. all the recalls over the summer put Chinese imports under more scrutiny and the agency that is set to monitor the safety of those goods. The senate is considering legislation that will more than double the consumer product safety commission's budget to nearly $150 million. Several reports indicate it will also authorize the agency to hire at least 100 new employees. The bill will give the commission more power in the market place, as well, by raising the maximum penalty for violating safety laws to $100 million up from just under 2 million. The commission staff has been cut over the years to about 400 employees. Well the number of products it monitors has soared to at least 15,000 types of consumer products. Everything from toys to all terrain vehicles to mattresses. Really was a hurricane task for a very tiny agency.

HOLMES: Is that the only thing we know about? Any other action being taken.

Such a focus on safety of our everyday items, T.J., you can imagine some states like California and Illinois are enacting tougher safety standards of their own. Over in China the government is investigating the production of fake or substandard goods and just yesterday nearly 800 people arrested there. Of course, most toys sold in the U.S. are made in China. That country is trying to show the world take its products are rely al. Very important source of revenue for China.

Turning to the markets, well stocks are falling and oil prices are falling, too, hovering around $92 a barrel. Still real high, though. Investors are taking a step back just one day before the Federal Reserve is set to make a decision on interest rates. A 4 percent drop in shares of Merrill Lynch also weighing. Yesterday we told you the company's chief executive was expected to step down. Today the official announcement was made. Stan O'Neal is retiring from Merrill Lynch just a week the brokerage reported the biggest mortgage write down on Wall Street to date. The Dow right now is down 60 points or nearly half a percent. The NASDAQ composite is down a quarter after percent.

T.J. I will throw it back into your capable hands.

HOLMES: Thank you so much. I'll try to make you proud Susan.

"YOUR WORLD TODAY" coming up next. Check in now with Hala Gorani to see what's they're working on.

HALA GORANI, CNN ANCHOR: We will go around the world and make a stop that is perhaps a bit longer than usual in Iraq today with a series of special stories coming to us from our Jim Clancy. My "YOUR WORLD TODAY" colleague. We'll talk about Iraq by the numbers. Go live to Baghdad. Jim Clancy will look at how IEDs and deaths and violence are down in Iraq but maybe we're going to be looking at the why.

Also emotional story of the children of the fallen we're going to bring you medal ceremony where two siblings are accepting a medal in honor of their fallen father, one in Baghdad the other in the United States.

And of course on "YOUR WORLD TODAY" we'll bring you news from all around the globe from London and the U.K. where the Saudi king is visiting with the queen of England. And also we're going to be taking you to Boston where the Red Sox are celebrating their win.

A lot more ahead. It's around the globe and around the spectrum of stories, as well. T.J. back to you.

HOLMES: Hitting a little bit of everything there. Hala Gorani, thank you so much now.

Well formerly ladies of the evening now in a new home. Finally finding a place to settle down.

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HOLMES: Let's take a look here. You'll probably remember this piece of college campus.

UNIDENTIFIED MALE: Don't tase me, bro.

HOLMES: As you can tell the University of Florida police did in fact taser him but that may be the only punishment for the student. The local prosecutor says he has apologized for disrupting the John Kerry appearance and will serve 18 months of probation. If he stays out of trouble he won't be prosecuted. Last week the university said the officers acted properly.

Another one here for you. Aging former street walkers now finding a new home. CNN's Harris Whitbeck has their story.

HARRIS WHITBECK, CNN CORRESPONDENT: In the courtyard of a Mexico City home for the elderly, this woman still likes to sing the songs of her youth of roses so beautiful they never die. She sings as she sang for her customers. Until seven years ago, she was a prostitute working some of Mexico City's meanest streets. She retired because of an inflamed nerve in her leg caused her too much pain. She won't tell us her age, that she says is not something you should ask a lady.

Dignity is one of the only things she and 31 other elderly prostitute whose live in the home have left. They were brought here by Carmen, the home's manager, herself a former sex worker. As she walked the streets, Carmen would come upon her elderly colleagues sleeping in doorsteps and begging for food. For them work was hard to come by. Their youth and beauty, their most valuable assets faded away. Still working, though, for whatever small amount they could get. I noticed they had nowhere to go, she says and it hurt me as a human being, as a woman, as a sex worker. None of us has commit add crime, she says, what we've done has been out of hunger, out of need. Carmen pounded on doors for years until she convinced the Mexico City government to donate an abandoned museum that was transformed into the home. It has been operating for just over a year. Carmen says she will take in more women but she can't afford to. Those she can afford to keep, say they are happy even fit took them until their last years to get off the streets.

Harris Whitbeck, CNN, Mexico City.

HOLMES: Civilians killed in Iraq, U.S. contractors say it was self-defense. Investigators dig in and we're told diplomats cut deals. "YOUR WORLD TODAY" coming your way at the top of the hour.

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HOLMES: Take a look. It took them 80-something years to win a world championship. Now for the second time in four years they are celebrating another World Series championship in Boston. Taking a look at the live pictures at the celebration happening there. The parade. Shutting down roads. So folks can get out there and celebrate the beloved Sox. A lot of folks are probably going to be calling in sick to work today. This is the second time in four years. The sox swept the Colorado Rockies in the World Series. A lot of us would have appreciated a more competitive world series but the Boston Red Sox appreciate the sweet.

We'll turn now to Jacqui Jeras while those folks celebrate. Not much to celebrate for some folks having to deal with the storm Noel and certainly some folks who are hoping to have a nice vacation to the Caribbean, that is not going to happen today, at least.

JERAS: For some of them. Just over a dozen flights have been cancelled now out of Miami international airport. To and from the Bahamas. If you have flights to Nassau or Freeport, you're going to need to call ahead. Call the individual carrier but we're getting word that American and American Eagle Bahamas Air have cancelled some of the flights. Also the cruise lines are still operating and your cruises are still set to sail but some of your cities that you'll be dropping by may be changed. Both Royal Caribbean and also Carnival Cruise lines because of the storm. Well Noel is now over Cuba here. That's where the center of circulation is. It's over land so it's been weakening impacting winds of 45 miles per hour.

Take note it's right here across the central Bahamas where the heaviest showers and thunderstorms are. Five to ten inches of rain can be expected. All right. Where is Noel expected to go? We think it's going to continue to move generally westward throughout much of the day today. Spend most of the afternoon and evening over Cuba then start to pull up to the north and curve towards it north and east through the northwestern Bahamas. Possibly making landfall over the islands. Now Florida you can see you're not in the cone of uncertainty but you're darn close.

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