Return to Transcripts main page
CNN Newsroom
Federal Reserve Cuts Federal Funds Rate; Consumer Product Safety Commission Falling Down on the Job?
Aired October 31, 2007 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DON LEMON, CNN ANCHOR: Your credit card debt, your loan payments, your mortgage, these numbers could be good news for all of them. We're following breaking economic news today.
The Fed has cut the federal funds rate by a quarter percentage point to 4.5 percent.
Let's go straight to Ali Velshi. He's on the floor of the Chicago Mercantile Exchange.
And, Ali, I believe you have got some more good news for us, correct?
ALI VELSHI, CNN CORRESPONDENT: Yes. This is across the country we're going to start to see it.
We just word in from Bank of America the prime rate of the Bank of America has now been cut to 7.5 percent. So, this Fed cut that has been affecting people here all afternoon is making its way to the consumers of America. Your credit card debt, the debt that you have that moves with -- that's tied to the prime rate, the prime rate, Don, is always three percentage points higher than the Fed rate.
So, when the Fed cut rates by a quarter percentage point, the prime rate starts. So, we have heard it from Bank of America. By the end of the day, we will hear it from all major banks. May take a while to trickle through to your own credit card, but you are going to see it there. You will see it in your mortgages. It's a bit of a discount.
We also have news on the other side that might not be so happy for you, Don. Oil has closed at the highest level it's ever closed at, above $94, I think $94.56 or 53. I'm just waiting for confirmation on that number.
We have got the dollar again at record lows against other countries. Why does that matter to you? Because you might be taking a trip. It also might matter to you because we import so many things into the United States. Every time you go to a store, do you buy something that is made in another country? Well, that got just more expensive again today.
So, it's a mixed message. This is good news to many people. It may help us out of this housing slump that we're in a little earlier. It might not. It may hurt with inflation a little bit, but the bottom line right now is October 31, leading into the busiest shopping season of the year, maybe some consumers have a little more reason to go out and buy that thing they were having second thoughts about -- Don.
LEMON: All right. Ali Velshi, thank you very much for that report -- Ali Velshi from the Chicago Mercantile Exchange. He's on the floor there.
And if you want to know even more about how the rate cut affects you, just log on to our Web site at CNN.com/money.
KYRA PHILLIPS, CNN ANCHOR: Well, NASA spent years and millions of dollars putting together a pile of data on commercial airline safety. Then they kept all that information to themselves to keep us from getting scared.
Could the news really be that bad? A congressional committee is getting the full story from the head of in NASA this hour.
Our Kathleen Koch is watching Michael Griffin's testimony -- Kathleen.
KATHLEEN KOCH, CNN CORRESPONDENT: Well, NASA Administrator Michael Griffin has been getting a lot of grilling. He's been doing a lot of explaining and a lot of apologizing, all this over this report of some 24,000 commercial pilots, 5,000 general aviation pilots that had some pretty astonishing findings, among other things, that twice as many bird strikes, near-midair collisions and runway incursions occurred than current government monitoring systems show.
Another finding, pilots reported a higher than expected number of last-minute changes in their landing plans. Now, Griffin said that NASA should not have withheld this report, they should have released it sooner, and he says they will by the end of the year, but Griffin warned that its findings were not definitive.
(BEGIN VIDEO CLIP)
MICHAEL GRIFFIN, NASA ADMINISTRATOR: The major concern I would have over this data at this point is that somebody might put too much credence in it. It is simply not credible to believe that the aviation community is experiencing nearly four times the number of engine failures that are being documented by the FAA. That is not credible to believe. If it's true, it is going to require some very strong justification, and we will pursue that.
(END VIDEO CLIP)
KOCH: Now, Griffin says that this information cannot be released, these actual findings, until the end of the year, because they contain information about specific airlines, specific incidents, specific planes, proprietary information that he believes could be traced back to identify the individual pilots. And they were promised anonymity.
So, he says it can't be released until then. Now, the pilots, the union representing pilots, the Airline Pilots Association, they're testifying in just a few minutes. And they do not, though, want this raw data released, Kyra. PHILLIPS: All right. We will of course be following that.
What are pilots telling you? I know you have had a chance to talk to some of them. We were able to talk to one earlier on in the newscast today.
KOCH: Kyra, they're telling me that actually the findings of the data, despite what Griffin says -- he was casting some doubts on them -- they say the findings ring true to them.
They say often it's a matter of perspective to whether or not a near miss on the runway or in the air was actually really serious. So, to one pilot, it might seem very serious. To the other pilot involved, maybe not so, so they might not report it if there's some kind of debate.
And then also pilots keep busy schedules, working long hours, even if they can file an anonymous report at the end the day that there was a near miss, a near collision, that often it's just something that unless again they believe it was a really serious incident, they tend to just pass it off, and move on, get on home.
PHILLIPS: We will keep following it. Kathleen Koch, thanks so much.
KOCH: OK. You bet.
LEMON: A destructive rainmaker in the Caribbean. What's next for Noel?
Our severe weather expert, Chad Myers tracking this deadly tropical storm.
We got Noel -- Noel -- correct yesterday, but you know what? I'm never sure about Caribbean, Caribbean, actually. Do you think, Chad Myers?
CHAD MYERS, CNN METEOROLOGIST: I think it's the tomato, tomato.
LEMON: OK.
MYERS: Yes, I don't think it really matters.
LEMON: Potato, potato.
(CROSSTALK)
LEMON: All right, what is up with Noel?
MYERS: Noel is right now on the northern coast of Cuba getting into the warmer water. Now, most of half of it has been in the warm water for a while, the southern half either over the mountains of Cuba, or down here and not making any progress. When a tropical system is over land, it usually loses or doesn't gain strength. Well, now that it's going to get into water, it is going to try to gain some strength. And I think that is probably in the forecast, because right now only a 50-mile-per-hour storm, but it's forecast to be a 65-mile-per-hour storm.
Now, the cone of uncertainly or the cone of probability still doesn't get it into the U.S., doesn't make landfall in the mainland. But it is so close, you still need to watch this thing. It's meandering now, is what they're calling him, not even moving at all, stationary, for its miles per hour being zero. But those are the new numbers, 2:00 numbers and the winds are gusting to about 65.
I do know there's a lot of rain going on, on the coast of Cuba. And although we're not getting any pictures out of there, there are probably similar pictures of the flooding there in Cuba, like we did pick up from the Dominican Republic and also from Haiti.
The biggest threat to the U.S. will be the loss of the beach all the way up and down the coast of Florida. And it is bad. There are a lot of people losing a lot of beach at this point in time, all the way from Jacksonville right on down into Miami, the waves crashing onshore, pulling the sand back out.
Now, sand doesn't go very far. It just goes the sandbar out just offshore, but if it's not on the beach, it's not much good, unless you're going to try to swim out to sandbar or if the surfer can actually make a great sandbar from it.
We got our tower cam now from WFTV, I believe, from Daytona Beach. Those are the big crashing waves now coming onshore. And we do know that even some homes up the beach are in peril because of the loss of sand and loss of their foundations. So, you know, you hate to see that. Boy, this is even a near miss. Could you imagine if this thing would get closer? And still could get closer. It certainly, certainly will get stronger and the waves bigger -- Don.
LEMON: Did you see that person kite surfing right there?
(CROSSTALK)
MYERS: I didn't see him surfing, no. I saw the big kite, though.
(CROSSTALK)
MYERS: Is he on the land?
LEMON: They're being pulled across the beach, yes. You can see right in front.
MYERS: Holy cow. Yes.
LEMON: Oh, well, that takes all kinds, right? But the winds are great, but they also can be very deadly.
All right, Chad Myers, thank you so much for that. (CROSSTALK)
MYERS: Sure.
PHILLIPS: Well, the winds are blowing, the waves are crashing and more South Florida beaches are washing away.
CNN's Rob Marciano seeing it firsthand at Hollywood Beach.
(BEGIN VIDEOTAPE)
ROB MARCIANO, CNN METEOROLOGIST: The rains have been sporadic, but the wind has been consistent. East and northeast winds continue to blow here along the Southeast coast of Florida, continues to push the Atlantic Ocean up against the shoreline.
These wave continue to batter this beach. Every time a wave rolls in, it strips away part of the sand. And that's been the big story, not only coastal flooding, but beach erosion. In some spots, the beach is completely gone and threatening some structures.
Here in Broward County, they have recently spent $45 million dumping up to two million cubic yards of sand on this beach, a lot of money for sure, but they need this beach for tourism. Not a whole lot of tourists out today. This lifeguard shack indicating high hazard as far as the surf is concerned, riptides dangerous. Notice how close the water is to this lifeguard shack.
It shouldn't be that close. Normally, high tide, which just came and went, would be well out to sea, so a lot of this beach certainly has been gone, and the winds are going to continue until Noel passes us off towards the north and east and these winds finally subside.
Until then, acres, maybe miles of coastline will be stripped away.
Rob Marciano, CNN, Hollywood Beach, Florida.
(END VIDEOTAPE)
LEMON: Playing with fire, automatic weapons fire. Police in Lakeland, Florida, found this video while investigating 18-year-old Shawn Newberry, who showed up at school wearing body armor under his clothes.
Police say the tape shows Newberry and his buddies blasting off AK-47s. Now, they say they also found a can of tear gas in Newberry's car. He's being held on $605,000 bond.
Well, plenty of real guns on the streets, and just about anybody can get ahold of them, but police are also see plenty of fake or toy weapons. They look so much like the real thing, they can put kids and cops under the gun for real. We will explore the issue with our security analyst Mike Brooks tomorrow at 1:30 Eastern right here in the CNN NEWSROOM. PHILLIPS: From produce to pet food to playthings, much of the ordinary stuff we ordinarily don't think much about has been in the news this year for being unsafe. Now Democrats want the person in charge of the Consumer Product Safety Commission thrown out.
Is the agency in charge of protecting consumers falling down on the job?
CNN's Randi Kaye met one consumer who said yes.
(BEGIN VIDEOTAPE)
RANDI KAYE, CNN CORRESPONDENT (voice-over): Dr. Walter Friedel nearly died after using Stand 'n Seal spay-on tile grout. Two others had died. And the product had been recalled. Yet, Dr. Friedel was still able to buy it. Why?
After the recall, in August 2005, records show the company that makes Stand 'n Seal, Roanoke, promised it had fixed the problem. And the Consumer Product Safety Commission allowed Stand 'n Seal back on the market, but did not ensure the new formula was safe. And, so, Dr. Friedel bought the cans that made him sick two months after the recall.
DR. WALTER FRIEDEL, INJURED BY STAND 'N SEAL: If you look at the bottom of the cans, none of these numbers are on the recall list. So, these were supposed to be safe cans.
KAYE: And they're still a threat. This recall notice on the Safety Commission's Web site only warns about cans bought before June 2005. It has never been updated. We called the commission to find out what it tells the public now about Stand 'n Seal.
(on camera): I'm calling about the Stand 'n Seal product.
CONSUMER PRODUCT SAFETY COMMISSION HOT LINE OPERATOR: It is on the recall. It is from April 2005 through June 2005. If they're made after that and the date code is different, then it's fine.
KAYE: So anything -- so, if I have a can from, say, October 2005, that should be OK?
CONSUMER PRODUCT SAFETY COMMISSION HOT LINE OPERATOR: Yes.
KAYE: Yes?
CONSUMER PRODUCT SAFETY COMMISSION HOT LINE OPERATOR: Yes, ma'am.
KAYE (voice-over): Some have already discovered it is not fine. Others may still have Stand 'n Seal at home, unaware that it could kill them.
(on camera): Do they just simply not have the tools to go through these investigations? DONALD MAYS, SENIOR DIRECTOR OF PRODUCT SAFETY AND CONSUMER SCIENCES, CONSUMERS UNION: That's exactly right. The Consumer Product Safety Commission is a woefully underfunded, understaffed safety agency.
KAYE (voice-over): May says the Safety Commission's 400 employees are responsible for monitoring 15,000 products, and just 15 inspectors oversee 300 ports. Just as bad, its lab equipment is outdated. Yet, the commission's acting chairwoman told a House panel in September:
NANCY NORD, ACTING CHAIRWOMAN, CONSUMER PRODUCT SAFETY COMMISSION: I think our recall process works very well.
KAYE: Home Depot pulled the product off the shelves this past March. The company refused an interview, but it has denied liability, saying in a statement that it removed the recalled cans and was not aware that problems continued. It adds, it "never knowingly sold any of the recalled product."
Dr. Friedel and nearly 200 other victims are suing Home Depot, along with Stand 'n Seal's manufacturer, but not the Safety Commission, even though Dr. Friedel blames it, too.
(on camera): Would you say the Consumer Product Safety Commission failed you in this case?
FRIEDEL: They did not fulfill their job; that's for sure.
KAYE (voice-over): And considering the Safety Commission never updated its warning, even after more people got sick, it still isn't doing its job.
Randi Kaye, CNN.
(END VIDEOTAPE)
PHILLIPS: And you can see more records from Randi Kaye, "Keeping Them Honest," weeknights, 10:00 p.m. Eastern, on "A.C. 360."
LEMON: A rope, a knot, a nation on edge. The very sight of a noose -- and there have been a lot of them lately -- can inflation emotions across the U.S. Straight ahead, we will preview our special investigative report, "The Noose: An American Nightmare."
(COMMERCIAL BREAK)
LEMON: Sixteen past the hour.
Just a few of the stories we're working on for you right here in the CNN NEWSROOM: Almost tropical-storm-force winds now lashing parts of Florida. They're a side effect of Tropical Storm Noel, which is moving north from Cuba. Noel has already killed nearly 50 people in the Dominican Republic and Haiti.
A guilty plea today in an alleged terrorist plot to gun down soldiers at New Jersey's Fort Dix. Agron Abdullahu was accused of conspiring to provide weapons to the would-be attackers. The prosecutors say he had the smallest role among the six men arrested.
And remember this pro-democracy protest by monks in Myanmar last month? Well, today, there's word dozens of them took to the streets again. It's the first reported rally since a crackdown by military leaders.
PHILLIPS: Let's get straight back to the NEWSROOM.
Fredricka Whitfield has been working on details on a number of developing stories.
Fred, what do you have for us?
FREDRICKA WHITFIELD, CNN CORRESPONDENT: Well, the Justice Department is very proud of a number of arrests being made by Operation FALCON. That's Operation Federal and Local Cops Organized Nationally.
It's resulted in 6,400 arrests. And this video that we just received about 15 minutes ago exemplifies the kinds of rests through these cooperative efforts that have taken place across the country.
The Justice Department officials are emphasizing that what this netting of so many suspects, fugitives has done is it has helped remove a number of alleged child molesters off the streets, as well as other folks who have been accused of assaults, et cetera.
They highlighted two particular cases, which are not exemplified in this video. This is kind of generic video that's being provided by the U.S. Marshals' office, but the Justice Department or Operation FALCON is very proud of the fact that they have arrested William Caldwell of Feliciana, Louisiana. He had 192 counts of molestation of a juvenile and 192 counts of sexual battery being imposed against him.
And then a young man by the name of Casey Smith, who is known to be an active gang member, he is accused of statutory rape of a victim under the age of 14, and is also going to be charged for some other child molestation charges.
So, this video representing a cooperative effort that has taken place involving federal, as well as local authorities in trying to go after thousands of fugitives and suspects. In the end, as of today, the Justice Department announcing that 6,400 arrests have been made because of this Operation FALCON, this cooperative effort -- Kyra and Don.
PHILLIPS: OK, Fredricka Whitfield, thanks so much.
LEMON: What a brave and lucky little girl. You won't believe what she went through before rescuers finally reached her. We have got her survival story right here in the CNN NEWSROOM.
(COMMERCIAL BREAK) PHILLIPS: Well, if you plan to those ugly teeth as part of your costume tonight, you better listen up. The Consumer Product Safety Commission says that some fake tees contain excessive amounts of lead.
The ones in question are painted white, black and orange with brown gums. Lovely, huh? And they sell for a couple dollars. They're made in China. Tens of thousands have been sold already since last year. Check your teeth.
A couple other recalls of Chinese-made products to tell you about. The Consumer Product Safety Commission is pulling the SimplyFun Ribbit board game off the shelves. The game's five frog- shaped pieces contain too much lead.
Also being called because of lead contamination, four Elite Operations military-style sold at Toys 'R' Us. They include Super Rigs, Command Patrol Centers, Barracuda Helicopter, and three-pack of 8-inch figures.
(BUSINESS REPORT)
LEMON: Getting a mortgage just got a bit easier. We will tell you how else the Fed's latest interest cut can help you. That's straight ahead in the CNN NEWSROOM.
(COMMERCIAL BREAK)
PHILLIPS: Hello, everyone. I'm Kyra Phillips, live at the CNN world headquarters in Atlanta.
LEMON: And I'm Don Lemon.
You're in the CNN NEWSROOM.
PHILLIPS: Having trouble getting a mortgage or paying off your credit cards? The Fed has just given you some help, lowering a key interest rate by a quarter percentage point to 4.5 percent. That's already led Bank of America to lower its prime lending rate, the interest rate banks charge their best customers.
Stocks have been edging higher, but they gave up some earlier gains after the Fed indicated it's also worried about inflation. That's a sign it might not cut rates again in December.
How will this all affect you? That's what we want to go.
Let's get to CNN personal finance editor Gerri Willis -- Gerri.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi there, Kyra.
Well, this is the second rate cut in two months. The Fed cut rates last month by a half-percentage point. And that was an attempt to both loosen up the credit market and stop the housing market collapse from sending the broader economy into recession.
But, while today's move is good news, it will not be a magic bullet for consumers. The housing market continues to struggle, consumer confidence at a two-year low.
WILLIS: Hi there, Kyra.
Well, this is the second rate cut in two months. The Fed cut rates last month by a 1/2 of a percentage point. And that was an attempt to both loosen up the credit market and stop the housing market collapse from sending the broader economy into a recession.
But while today's move is good news, it will not be a magic bullet for consumers. The housing market continues to struggle. Consumer confidence at a two year low. Well, oil prices -- they keep rising.
(BEGIN VIDEO CLIP)
GREG MCBRIDE, BANKRATE.COM: The biggest impact is probably more psychological. And, after all, the economy is not continue to grow if uncertainly causes consumers and businesses to hesitate from spending. A Fed rate cut, while not making a big difference in terms of dollars and cents on that monthly credit card payment does give consumers a little bit of confidence as we head into the holiday shopping season.
(END VIDEO CLIP)
WILLIS: Well, and sometimes that psychological boost can make a big difference -- Kyra.
PHILLIPS: So, Gerri, the housing market is really hurting people right now.
What is this going to mean for homeowners?
WILLIS: Well, I've got to tell you, Kyra, not that much. Even if you have an adjustable rate mortgage, you'll get little relief. If you have a 1-, 3- or 5-in-one ARM, your rates will go down a bit. It won't be a 1/4 of a percentage point reduction in lockstep with the Fed, but it will be something. And if you took out an ARM between 2002 and 2004, you'll be facing higher adjustable rates anyway, because during those years, rates were at historic lows. Folks who have a home equity line of credit, though, here's some good news. In the next two to three billing cycles, you'll see the rates on those loans fall. And, of course, if you need to consolidate debts or you need money for medical bills, college expenses, shopping around for a HELOC, a home equity line of credit, may be a good idea.
PHILLIPS: Well, what does it mean for people with credit cards?
WILLIS: Well, I've got to tell you, if you have a variable rate credit card and you carry a balance from month to month, you'll see a small decrease in your rate. For example, with a balance of $5,000, you'll save about $24 annually. That's $2 a month. Now, one thing may not be as obvious is that your credit card company can decide to raise your rates at any time for any reason. Keep a sharp eye on that rate you're paying. And if your APR -- that's your interest rate -- is higher than 12 percent and you've been paying your monthly bill on time, your best move then is to call the credit card company and ask for a lower rate. I know it sounds impossible, but it really works.
PHILLIPS: All right, well what about people who want to invest in CDs or maybe have bank accounts or 401(k)s?
WILLIS: Well, the savers will really get the short end of the stick today. When the Fed cuts rates, CD returns, money market returns, saving account returns generally go down. If you've got a lot of money sitting on the sidelines, think about investing in short-term bond funds. You shouldn't have more than three to six months worth of living expenses in cash unless you're looking to use that money within the next year to put a downpayment on a house, pay a college tuition bill or some other big expenditure.
Now, you may look into investing in some low cost mutual funds or index funds. Check out Fidelity or Vanguard for some low cost options. And when it comes to your 401(k), don't get scared away by the market. Make sure you invest for the long-term. Keep that money growing over time because that's what will provide for your retirement.
PHILLIPS: I'm sitting here taking notes.
Gerri Willis, thanks.
I'm getting short-term bond funds and index funds. I'm on it.
(LAUGHTER)
PHILLIPS: OK.
WILLIS: Good deal.
PHILLIPS: Thanks, Gerri.
WILLIS: My pleasure.
PHILLIPS: And if you want to know even more about how the rate cut affects you, you can just log onto our Web site, money.CNN.com.
LEMON: Well, he normally has his eyes on the stars, but today the head of NASA is talking air travel before a committee on Capitol Hill, specifically, a safety report years in the making that sat on the shelf at NASA with information on the safety of America's skies.
Why wasn't it released?
Michael Griffin says there's no excuse.
(BEGIN VIDEO CLIP)
MICHAEL GRIFFIN, NASA ADMINISTRATOR: I try to review everything that I believe will be significant before it goes out, but I don't have enough hours in a day to review every single thing that goes out of NASA. And sometimes mistakes are made. This was one.
And when that occurs, as the agency head, I pay the price for it.
UNIDENTIFIED MALE: But you have the time now to come and mea culpa.
GRIFFIN: Obviously, I have had to make the time, because we did make a mistake and the mistake rests on my shoulders.
(END VIDEO CLIP)
LEMON: Well, earlier, NASA officials said they didn't release the report out of fear it would scare passengers. Griffin says he plans to release the report to the public.
Close calls in the air and on the ground -- they really are a scary fact of life.
(BEGIN VIDEO TAPE)
LEMON (voice-over): For a pilot, it is the second worst nightmare -- coming within a hair breadth of crashing into another plane. Yet there are several near collisions every year -- in the air and on the ground. And experts warn they will only increase in coming years as skies become more crowded with jetliners and a new breed of mini-jets -- four to eight seat plans used as air taxis and charters. While near misses in the air often dominate the media for days, close calls on the ground are far more frequent. But both are rare -- about one for every two million takeoffs and landings. Actual collisions in the air are even more uncommon. A collision on a corporate jet and a Boeing 737 over the Amazon jungle last year was only the second such accident involving two aircraft equipped with anti-collision systems. The first happened in 2002 over Germany, when a Russian jet slammed into a Boeing 757. Near collisions happen, according to the FAA, for a number of reasons -- including pilot error, mistakes by air traffic controllers, weather and landing patterns in use at the time.
Many experts say collision avoidance systems have worked well. In the words of one former pilot: "I think I'd have taken a King Air (ph) in the windshield one day without it."
(END VIDEO CLIP)
PHILLIPS: She's only three, but already she's been through more than most of us. Kate Williams is the only survivor from a small plane that crashed in the mountains of British Columbia. Rescuers found her hanging upside down, still strapped in her car seat. The plane, piloted by her grandfather, was nose down and flipped over in an icy creek. Rescuers say they knew she was OK when they pulled her out and she cried for her teddy bear -- which was still in the wrecking, by the way. Little Kate and her bear spent the night in the hospital, her parents right by her side.
(VIDEO CLIP OF ROBERT GOULET PERFORMANCE) LEMON: Award winning singer and actor Robert Goulet has died in a Los Angeles hospital. Goulet suffered from pulmonary fibrosis and had been waiting for a lung transplant. The Massachusetts born baritone began his career in the 1950s. His big break came in 1960, when he landed the role of Sir Lancelot in the original production of "Camelot".
After surviving a bout with pancreatic cancer in the 1990s, he had this to say to CNN's Larry King.
(BEGIN VIDEO CLIP FROM "LARRY KING LIVE," MARCH 29, 2000)
ROBERT GOULET, ACTOR: I'm not fearful because if it comes back, I'm sure that we have all sorts of doctors in the world today with all sorts of new prescriptions and pills and areas and places to go where you can get rid of all this. The thing that I got -- I get a kick out of is when I had my operation, I was looking at all these medical journals from all over the world. And they all said the same thing about the prostate operation -- the radical prostatectomy. "If you live," they said, "for five years after that operation, on average, you have another year-and-a-half left to live."
So June the 7th, I should be dead.
(END VIDEO CLIP)
LEMON: Well, among Robert Goulet's honors -- a Grammy, a Tony and an Emmy.
He was 73 years old.
(COMMERCIAL BREAK)
LEMON: Straight to Fredricka Whitfield with details on a developing story -- Fred, what do you have for us?
FREDRICKA WHITFIELD, CNN CORRESPONDENT: Well, Don, more on that shooting taking place in Philadelphia today -- the shooting involving a police officer. Apparently a police officer was in a Dunkin' Donuts at about 10:00 this morning when a suspect grabbed his gun -- the police officer's gun -- and then actually shot him in the head. The police officer is in extremely critical condition. You're looking at pictures of the crime scene there at the Dunkin' Donuts there at 66th and Broad. And that's the police officer, Charles Cassidy.
Meantime, the suspect is still at large. It's why so many schools in the area were on lockdown for a period of a day and now the lockdown has lifted only for students to go home -- but not because they actually have a suspect in custody.
Again, the aerial searches right here, as well as the searches on the ground for this person responsible for taking the police officer's weapon and then shooting him in the head. Again, he -- the officer -- is in extremely critical condition.
This is the second shooting of a Philadelphia police officer in two days now -- Don.
LEMON: Wow!
Very sad.
All right, Fred, thank you so much for that story.
Can you go an entire day without spending a single cent?
Well, radio talk show host Warren Ballentine is pushing for a National Economic Blackout Day this Friday. He's calling on his three million daily listeners and anyone else who will listen not to spend money. Ballentine says he wants to send a message for Washington after a string of what he calls injustices. They include the Jena 6 case out of Louisiana and a recent spate of noose sightings -- but also the mortgage crisis, job outsourcing and the war in Iraq.
PHILLIPS: An oil field equipment company says it's banned four contractor workers for allegedly hanging nooses at one of its facilities in Houston -- yet another reminder, as if we needed it, that nooses aren't just a sorry relic of a tragic past, but still a tool of fear and intimidation.
CNN's Special Investigations Unit has been looking into it.
And I want to warn you, this report contains some disturbing images.
Here's just a taste of my upcoming special "The Noose: An American Nightmare".
(BEGIN VIDEO TAPE)
COREY PEGUES, PRESIDENT, NOBLE: There was a noose found in the men's locker room of the Hempstead Police Department.
PHILLIPS (voice-over): On September 28th, Cory Pegues, the president of a black law enforcement group, became enraged about a noose hanging in this small Hempstead police station. He immediately let the local press know.
PEGUES: Just like at this. What this represents -- when I hold this up, when I see this, I think of my ancestors hanging off trees. We're appalled that in 2007, someone had the audacity to put a noose in a police department -- where people are sworn to protect and serve.
PHILLIPS: Hempstead Deputy Police Chief Willy Dixon believes he was the target of someone's hate and ignorance.
DEP. CHIEF WILLIE DIXON, HEMPSTEAD, NEW YORK POLICE: A noose, in my mind, represents one of the darkest periods in this country's history. And it wasn't enough to lynch an African-American, you would castrate him to add insult to injury. And after the lifeless body was hanging from a tree, he would then set that individual on fire.
(END VIDEO TAPE) PHILLIPS: It's heart-wrenching.
Well, a CNN special investigation -- you won't want to miss this -- "The Noose: An American Nightmare". You can catch it tomorrow night, 8:00 Eastern, only on CNN.
And to find out more about noose incidents across the country or to watch online videos on racial issues, check out a special report, "The Noose". That's at CNN.com/noose.
LEMON: British bird lovers all over are atwitter and the cops are called to the scene.
Will trouble come home to roost for, guess who -- Prince Harry, none other.
(COMMERCIAL BREAK)
PHILLIPS: Rattled nerves, things flung off shelves -- that's about the extent of the damage from the earthquake that shook the San Francisco Bay Area last night. It was centered nine miles northeast of San Jose and at a magnitude 5.6, it was the strongest quake there in almost 20 years. Just to make sure it's all OK, Governor Arnold Schwarzenegger wants roads, bridges and levees given the once-over.
A freelance photographer was rolling when the ground began rumbling last night and caught the quake on videotape.
(VIDEO CLIP, COURTESY CISCO SYSTEMS)
PHILLIPS: Well, this was a Cisco Systems executive doing an interview last night in San Jose, California. As you can see, people move pretty quickly to take cover when the Earth below begins shaking. They know exactly what to do. The earthquake was a magnitude 5.6. And thanks to Cisco Systems and the photographer, Kim Chi Tyler (ph) for that video submission.
LEMON: Absolutely.
Whatever the sport, scouting reports help teams prepare for their next opponent.
But does that extend to drug testing of major league baseball players?
The "New York Times" reports pro-ball teams are routinely tipped off about drug screening a day or more in advance.
Well, apparently not clued in is San Diego Padres gold gloved center fielder, Mike Cameron. Today, he was suspended for the first 25 games of next season for his second positive test for a banned stimulant.
PHILLIPS: He who cannot be named in England is all over the news everywhere else. The queen's nephew has been outed as the target of an alleged blackmail attempt. Forty-six-year-old Viscount Dave Linley is the son of the late Princess Margaret and twelfth in line to the throne. Strict legal rules bar British media from naming him, but not other outlets. A royal aide allegedly claims he shared sex and drugs with Linley. Two men accused of using that info in a blackmail attempt are due in court in December.
LEMON: Well, Prince Harry may have ducked that scandal, but he's certainly found another. British police questioned Harry after two endangered birds were shot dead on the royal estate in Norfolk. Well, sources say the Prince and his friend were the only people known to be shooting on the estate when the birds were killed. An official spokeswoman says Harry told police he had no knowledge of that incident. The Royal Society for the Protection of Birds says the victims -- hen harriers -- are some of the U.K.'s most endangered, with fewer that 20 breeding pairs left.
PHILLIPS: Well, to the former Soviet Union now, where you can never say the president of Georgia doesn't get personally involved with trouble in his country.
Take a look.
(VIDEO CLIP OF GEORGIAN PRESIDENT MIKHEIL SAAKASVILI)
PHILLIPS: Well, for those of you who speak the language, we hope those comments were suitable for television. That's President Mikheil Saakasvili in a shoving match with armed Russian soldiers on the shared border. The president flew there after hearing Russian troops allegedly arrested and beat some Georgian soldiers. About 2,000 Russian troops are deployed for Georgia on a peacekeeping mission. The president reportedly ordered the Russian commander out of the country.
LEMON: Can busting a move help a presidential candidate break out of the pack?
Well, we've all seen the clip of Barack Obama getting his groove on on the "Ellen DeGeneres Show". But he's not the first presidential hopeful to shake it on national TV.
Our Jeanne Moos breaks it down for us.
(BEGIN VIDEO TAPE)
JEANNE MOOS, CNN CORRESPONDENT (voice-over): We're not talking break dancing -- we're talking Barack dancing.
(BEGIN VIDEO CLIP FROM "THE ELLEN DEGENERES SHOW, COURTESY TELEPICTURES PRODUCTIONS)
ELLEN DEGENERES, TALK SHOW HOST: Come on.
(END VIDEO CLIP)
UNIDENTIFIED FEMALE: Wonderful. It makes me want to dance.
UNIDENTIFIED MALE: He's a little stiff.
(BEGIN VIDEO CLIP FROM "THE ELLEN DEGENERES SHOW, COURTESY TELEPICTURES PRODUCTIONS)
SEN. BARACK OBAMA (D), ILLINOIS: All right, you've got (INAUDIBLE).
(END VIDEO CLIP)
UNIDENTIFIED FEMALE: He's doing this thing here.
UNIDENTIFIED FEMALE: He's doing all right. Ellen's doing better.
MOOS: And how's Rudy doing?
(BEGIN VIDEO CLIP FROM "THE ELLEN DEGENERES SHOW, COURTESY TELEPICTURES PRODUCTIONS)
SEN. BARACK OBAMA (D), ILLINOIS: I'm pretty sure I've got better moves than Giuliani.
DEGENERES: Yes.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP, NEW YORK, MARCH 2000)
UNIDENTIFIED MALE: Come on, Rudy, get the booty back. Booty back.
(END VIDEO CLIP)
MOOS: We had to dig deep in our archives to unearth these moves. Tap dancing -- not bad.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Come on, Rudy!
(END VIDEO CLIP)
MOOS: Disco dancing -- questionable.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Shake what you've got.
(END VIDEO CLIP)
MOOS: Rudy was shaking what he had seven-and-a-half years ago at an annual event where the press lampoons the mayor and the mayor lampoons the press. It sort of makes you re-evaluate Barack Obama.
UNIDENTIFIED MALE: Great moves.
(BEGIN VIDEO CLIP FROM "THE ELLEN DEGENERES SHOW, COURTESY TELEPICTURES PRODUCTIONS)
DEGENERES: You're the best dancer so far of the presidential candidates. OBAMA: It's a low bar.
(END VIDEO CLIP)
MOOS: Practically on the ground. So far, the only presidential candidate to appear on the show was Hillary Clinton -- and she walked onstage. Hillary prefers to have some fun.
(VIDEO CLIP OF HILLARY CLINTON DANCING)
MOOS: At events like her husband's inauguration, the only head- to-head dance competition was an imaginary one.
On "Jimmy Kimmel Live," a break dancing battle between an Obama look-alike and a Hillary look-alike.
(VIDEO CLIP FROM "JIMMY KIMMEL LIVE," COURTESY ABC)
MOOS: Apparently Hillary won.
At church, Obama seems to have a natural rhythm thing going -- even busting out a few robot moves.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Come on, everybody, let's dance!
(END VIDEO CLIP)
MOOS: Rudy may well have been trying to dance badly to be funnier. As for Obama's reviews, they ranged from "truly creepy -- Obama looked like he was channeling Cher" to "How can you pay attention to the issues when he looks like that and then shaking what his momma gave him? Whoo, someone fan me."
UNIDENTIFIED FEMALE: I think Barack has better moves than that. He's just -- he's being conservative on TV.
UNIDENTIFIED FEMALE: Oh, he dances like the old folks.
MOOS: Who cares? These candidates are looking for a surge at the polls, not the pelvis.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Think presidential.
(END VIDEO CLIP)
MOOS: Jeanne Moos, CNN, New York
(END VIDEO TAPE)
LEMON: OK. Well, he's not dancing, I'm sure.
PHILLIPS: Are you kidding me? Wolf Blitzer's got the moves.
LEMON: Can you break...
PHILLIPS: Show us a little bit, Wolf.
LEMON: Can you bust a move, Wolf?
WOLF BLITZER, HOST, "THE SITUATION ROOM": You're going to have to see those moves when I'm on the "Ellen Show". Then I make my debut.
(LAUGHTER)
BLITZER: But it's not going to happen until then, guys.
Let me tell you what's coming up at the top of the hour.
Hillary Clinton recovering from a tough debate last night. A look at whether it will affect her momentum and what her next moves might be.
Also, Karen Hughes now on her way out. She was supposed to bridge the gap between the U.S. and other nations, but has anything really improved?
Plus, homeland security hoping to tighten their rules on yet another way of getting around -- the new requirements that could be coming out for small boats.
All that and a lot more -- no dancing -- right here in "THE SITUATION ROOM" -- back to you guys.
LEMON: And we hear you are going to be on "Ellen" there, Wolf?
BLITZER: It probably will happen sooner rather than later and, you know, you just stay tuned for that.
PHILLIPS: You'd better take her to task, Wolf.
We're going to be watching.
BLITZER: All right.
LEMON: All right, thanks, Wolf.
PHILLIPS: Well, proving there is a convention for everything, we announce the 2007 World Toilet Summit in New Delhi, India. This is no joke, though. Come on now, this is serious business.
(SOUND OF A TOILET FLUSHING)
PHILLIPS: Thank for you that sound. That was perfect. According to the whoo, two-and-a-half billion people around the world lack access to clean toilet facilities. That's creating a huge public health problem. Still, we had to snicker when we saw the summit program, which tells guests to be seated by 3:30 p.m.. LEMON: Well, it's serious, too, because sometimes the water just goes out there in the middle of the day. You never know.
He looks, he points -- are you sure it's not a she?
A scarecrow come to life -- not in the Land of Oz, but in the Granite State.
PHILLIPS: And carving the Halloween pumpkin can be a little tricky, so imagine doing it with a shark looking over your shoulder. We'll have that, straight ahead.
(COMMERCIAL BREAK)
LEMON: Well, talk about Halloween spirit, for the past few years, David Williams' stuffed scarecrow has been perched amid the cornstalks in his front yard. A few days ago, the New Hampshire man decided to bring his creation alive by becoming the character. Some folks point and smile. Others run home to get the kids. Still others, well, they just call police. The cops were afraid the monster might cause traffic accidents. They decided the scarecrow can come alive only once a year -- on Halloween night. And he's got to stay away from the street.
Does he work?
That's his job.
PHILLIPS: It wouldn't be Halloween without Jack 'O Lanterns, right?
And carving them can definitely be an art form.
But what about trying it underwater?
It's no problem for these divers at an aquarium in Tampa, Florida, with creatures of the deep, including sharks, swimming all around them. They make it look pretty easy -- just a few cuts here, a few cuts there and voila -- the perfect pumpkin. The event is part of the aquarium's Sharktoberfest.
All right, the closing bell about to ring on Wall Street.
LEMON: Susan Lisovicz is standing by with a final look at the trading day.
I always look at this video of stuff like that and I go why -- why, Susan?
Why?
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, I'm going top that. I mean you each had your own Halloween story.
LEMON: Yes.
LISOVICZ: Well, I'm going to do my howl-a-ween. That is... LEMON: The queen of segues right there.
LISOVICZ: ...the very disturbing fact -- and amusing fact -- that seven-and-a-half -- nearly seven-and-a-half million households will dress up their pets this Halloween. And we have the documentation to prove it. Yes, there they are -- Superman, Dorothy from Oz, subway turnstiles, milk cartons, as well as the more conventional princess...
LEMON: Conventional.
(LAUGHTER)
LISOVICZ: Dracula.
(LAUGHTER)
PHILLIPS: That's great.
LISOVICZ: You know, these -- these pets, they're so patient with us. They are so patient. It's a big money maker. Target and Wal-Mart both have costume sections for pets.
But let me just segue into the treat for investors this Halloween. The Federal Reserve cutting interest rates to 4.5 percent. Wachovia, J.P. Morgan, Bank of America already cutting their prime lending rates to 7.5 percent. So it is a treat. For all of us, money will be cheaper as of today.
(STOCK MARKET REPORT)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxant.com
