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Atlanta: After the Tornado; President Bush Meets With Bernanke and Paulson to Discuss Economy; New York City Crane Accident Claims Seventh and Final Victim

Aired March 17, 2008 - 14:00   ET

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

DON LEMON, CNN ANCHOR: As Bear Stearns goes, so goes what, exactly? Not exactly sure. Wall Street wonders who's next as the nation's fifth largest investment bank suffers a breathtaking reversal of fortune.
FREDRICKA WHITFIELD, CNN ANCHOR: And it hasn't collapsed, but its stock price certainly has. We'll see what it all means for your bank, your stocks, and your credit, straight ahead in the NEWSROOM.

Hello, everyone. I'm Fredricka Whitfield at the CNN World Headquarters in Atlanta. Kyra Phillips is on assignment.

LEMON: And I'm Don Lemon.

You're in the CNN NEWSROOM.

WHITFIELD: And the tragedy in New York this past weekend, well, it worsens. We're understanding right now that a sixth body has been found in the rubble there of that crane that collapsed on Saturday right there in Manhattan.

So a sixth body found. One still may be missing. In all, after this took place on Saturday, 24 people have been injured in this accident.

Our Jim Acosta has been following the story. We'll check in with him on more details throughout the afternoon.

LEMON: Government policymakers are pulling out the stops. They're taking dramatic steps to calm financial markets in the face of a growing crisis.

The latest symptom, the government-backed sale of the fifth largest Wall Street investment bank, Bear Stearns, went up for bargain basement price of $2 a share. A stunning collapse and perhaps not the last on Wall Street. To calm investors, the Federal Reserve took the unusual step yesterday of cutting a key interest rate, and also moved to expand its emergency lending powers.

Here's President Bush, fresh from a meeting this morning with Treasury Secretary Henry Paulson.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want to thank you, Mr. Secretary, for working over the weekend. You've shown the country and the world that the United States is on top of the situation.

Secondly, you've reaffirmed the fact that our financial institutions are strong and that our capital markets are functioning efficiently and effectively.

(END VIDEO CLIP)

LEMON: Well, the moves being made in Washington and the Bear Stearns buyout are causing a huge buzz on Wall Street.

Live for us now in New York, CNN Senior Pentagon -- CNN Senior Correspondent -- excuse me -- Allan Chernoff.

Allan, sorry. I have to get that out. Senior Correspondent Allan Chernoff.

What do you have for us, Allan?

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Don, you know, that might actually be appropriate, because I have to say, the government is really acting in a defensive posture right now.

What the president was saying just before about the capital markets, well, the capital markets are frankly not functioning as well as they should, and that is why the government is using our tax dollars to get involved here to actually help prop up this buyout of Bear Stearns. In fact, $30 billion of our money is behind this back- out.

The Federal Reserve said to JPMorgan Chase, we will back up to $30 billion of losses in the worst paper, the mortgage-backed securities, that may not be worth very much, that may be worthless, indeed. So we are involved in this bailout of Bear Stearns.

It is a very scary time. And the Federal Reserve is doing this, the government is doing this, to make sure that the capital markets don't totally freeze up.

The capital markets are where businesses in the U.S. are able to raise money to expand, to keep functioning. If they totally freeze up, forget it. The economy is going far worse than a recession. Then we really could potentially be talking about a depression.

LEMON: So, Allan, really, the bottom line is, how does this affect consumers' bottom line?

CHERNOFF: It's a very dramatic step that is being taken right now, and it would affect us all if this does not work. Now, a lot of people are saying, hey, why buy Bear Stearns? Why help bail them out? The government is doing this because it feels it has to.

Yes, they are taking what they call a moral hazard. Bear Stearns, apparently, did bet on very, very dangerous, risky securities. Maybe, some people argue, they should have been allowed to fail. But the Federal Reserve engineered this whole buyout with JPMorgan Chase in order to protect, as I said, the capital markets, which are essentially the bond markets everywhere that businesses are able to raise capital, able to raise money to keep functioning.

That is really what is at stake here. It is the health of our economy, so it affects us as consumers in the government trying to just prevent the economy from simply collapsing and having an absolutely horrific, horrific downturn.

LEMON: Allen Chernoff, thank you.

WHITFIELD: Well, in the battle for the White House, voters are telling us the economy certainly tops all other issues for them. And today both Democratic candidates are talking it up. From both Hillary Clinton and Barack Obama, criticism of President Bush.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: There is a long list of what I would have done. I would have been very engaged as president with my economic team, with many members of Congress. I would have had a summit. We would have stayed in one place until we had a resolution about what we were going to do.

Otherwise, we will continue to see these rather dramatic ad hoc interventions. And we're not finished with this. And that's why we have to remain vigilant.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: If you're really ready for change, we can't just tinker around the edges, we've got to bring about a fundamental change to our economy, one that's just not about representing Wall Street, but representing main street. And that means we're going to stop giving tax breaks to companies that ship jobs overseas and start giving tax breaks to companies that invest right here in Pennsylvania and all across America.

(END VIDEO CLIP)

WHITFIELD: Obama's comments came at a town hall meeting in Pennsylvania. Clinton's came at a foreign policy speech happening in Washington.

Meantime, President Bush is meeting within the next hour with his working group on financial markets, which includes Fed chairman Ben Bernanke and Treasury Secretary Henry Paulson. We're keeping our eye on that.

And the economy, it is issue #1 indeed. And we'll bring you all the latest financial news all this week at noon Eastern, information you need on the mortgage meltdown, the credit crunch, and more. "ISSUE No. 1," 12:00 p.m. Eastern. LEMON: Block after block of blownout windows, twisted metal and crumpled roof. Safety is the major concern in the aftermath of a powerful tornado in the middle of downtown Atlanta.

The historic Cabbagetown neighborhood was especially hit hard. That happened on Friday night. Huge old trees were ripped up by the roots, destroying homes almost as old. Amazingly, amazingly, no one was killed.

And the next day, more tornadoes swept across north Georgia. One man was killed by flying debris. A woman died when her home took a direct hit. I saw that one live and in person.

As you have no doubt heard, the freak tornado hit while Atlanta was playing host to thousands of visitors. A lot of venues are damaged. And CNN's T.J. Holmes is right in the middle of it.

T.J., how is the cleanup going? Because it was a mess down there all weekend.

T.J. HOLMES, CNN CORRESPONDENT: It's still a mess. It's going to be a mess for a while, no doubt, Don, but the cleanup is going on. And it appears to be going fairly well. Nothing like -- of course, you and I were down here first thing on the scene Friday night after it happened. Nothing like that when we first got to the scene, but still, a mess down here.

And you talked about those visitors in town. Well, many visitors are still in town, and they don't have much to do right now, because their plans totally have changed because of what has happened to downtown Atlanta. So, a lot of those people are now down here seeing a different type of tourist attraction.

If you just look at the sidewalk down there, you still see plenty of people out, and so many of them are just going by here seeing what they can see, seeing the mess what this tornado left. Everybody with those camera phones out and with different cameras taking pictures down here.

I want to give people -- many people have visited Atlanta, and no doubt if you've visited Atlanta, you've been right down to this area. If you're going to be visiting Atlanta, no doubt you're going to be coming downtown, because this downtown, of course, the heart of the city.

But we are in the heart of that heart, if you will. This area right across the street here, everybody will remember this and know this area, Centennial Olympic Park.

This was the site of the Olympic park bombing back in 1996. There's supposed to be eight of these torches, if you will, surrounding this center part of this park. Well, two of them knocked down by this tornado that blew through downtown Atlanta on Friday night.

So, of course, we have debris strewn about, stuff is all over the place still down here. But it is, Don, a dangerous place because you have power lines down, you have falling glass that's still falling, because that stuff is loose up there in a lot of these buildings. So it's still a dangerous place to be downtown. Police are telling people not to come in.

Now, of course, we talked about these people who are down here just kind of looking at this damage themselves. Well, I have Chad Myers is standing by with me now, our meteorologist. And a meteorologist, you all look at it a little differently from somebody just walking down the street.

Tell me, when you walk out here, what are you looking at and what jumps out at you?

CHAD MYERS, AMS METEOROLOGIST: I see windows that are broken out 60 stories high. Straight-line winds won't do that. You know, we always talk about, we won't know if it's a tornado until the meteorologist goes out and looks at it. Well, once a meteorologist looks at it, this is a no-brainer.

Things are falling down in different directions, windows are broken out on different sides of buildings. And you don't -- you can't get damage 60 stories high if it's just a straight-line wind.

We right now are standing in the northernmost part of what maybe you'd call the eye wall, the eye wall of the tornado, the northernmost part, where the winds were blowing down the street we're on, and then right into Centennial Park. That's why those towers you see here are blown down to the north, because our winds right here were from the south and then eventually from the east.

Now, we have windows blown out on the Omni, the old Omni, which we call the south tower. And then the new north tower, at a 90-degree angle, more windows are blown out.

All of the windows that you see are broken were not because of the force of the wind. Something was picked up in this park -- it could be a shingle, it could be the asphalt off the top -- or the rocks off the top of the CNN Center -- and every one of those windows were broken by a rock, a stone, a shingle hitting it.

HOLMES: Haven't heard people explain it to us like that yet. I don't know why people just assume these strong winds were busting out these windows out.

MYERS: Blowing the windows out. It didn't happen. It didn't happen. I'm going to have the cameraman turn completely around. So this might be kind of a weird angle. But, now this is the Westin, the big, round building. You can see it from anywhere in Atlanta in the surrounding communities.

You cannot get windows broken out 60 stories high just by a wind gust in that random fashion. That is where debris was picked up from down here, lifted up into the sky, and thrown into those random windows up there. And you notice, all the window -- all the glass is not gone. This is a problem now, because it's kind of a gusty day. Parts of these buildings, they're still coming down.

I was walking by the CNN building just coming to this live shot, and another window broke right above me. I kind of scrambled out of the way. We should not have this many people on sidewalks right next to broken windows. It's not very safe out here.

HOLMES: And that's exactly what -- and that's why police are telling people -- one thing with the traffic, Don, it's just a mess getting down here, but that's another thing like Chad just hit on. This stuff is still falling. It can keep falling, and it's dangerous down here for a lot of folks.

But the cleanup is under way, but like Chad says (AUDIO GAP) right now -- Don.

LEMON: Yes. And T.J. and Chad, the amazing thing is, we look at that CNN Center behind you, it's amazing -- and the Omni hotel -- that nobody was hurt. I was out there on Friday, and you could see chairs and luggage and different things from rooms that had gotten knocked out on to the street. And that could have, you know, easily have been a person, T.J., who got blown out the window on to the street there.

Really amazing that nobody got hurt. Nice job today though.

HOLMES: We got lucky on Friday. We got lucky, Don. We got lucky.

LEMON: Yes. All right. Thank you -- thanks to you and to Chad. It really is amazing.

HOLMES: All right.

WHITFIELD: And this too was pretty amazing, an amazing moment if you watched it here live on CNN. Right now you're hearing the chants kind of "David" replayed ringing through the New York State Assembly in Albany.

David, as in David Paterson, sworn in last hour as the state's first African-American governor. He took the reins after his predecessor, Eliot Spitzer, resigned in a prostitution scandal. Paterson pledged to bring a new day to New York.

(BEGIN VIDEO CLIP)

GOV. DAVID PATERSON (D), NEW YORK: In so many days we woke this morning to a not so ordinary day. But in one way, we woke this morning to a New York dawn that is like every one that came before it. For today, like we always do, in spite of the obstacles, regardless of the circumstances, we move forward.

(END VIDEO CLIP)

WHITFIELD: Paterson also brought some welcomed levity in his speech to state lawmakers. He poked some fun at his colleagues and even at the fact that he is legally blind.

LEMON: Well, you feel it every day. Economic problems affect you and your family and everyone else in America. So, how long will the downturn last? We'll hear what an economic expert has to say about that.

WHITFIELD: And big bucks for Paul McCartney's estranged wife, Heather Mills. A long, winding and expensive road is coming to an end. We'll tell you how much money she's actually getting.

(COMMERCIAL BREAK)

(NEWSBREAK)

WHITFIELD: All right. The Justice Department is calling on the FBI to do a better job in getting names on and off the government's terror watch list.

Our justice correspondent, Kelli Arena, is in Washington with details. Explain.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Hey, Fred.

You know, we've all heard stories about the government's terror watch list -- people who are stopped at airports, for example, because their name is on some super-secret list. Well, there is a new report, as you said, from the Justice Department's inspector-general about that list, and there were some problems found.

The report says that the FBI has not always provided the newest or the most accurate information about terror suspects. And in some cases, did not remove people from that list when it was necessary to do so.

Fred, you may remember, CNN got an exclusive look inside the terrorist screening center which is responsible for that list. There are hundreds of thousands of names on it connected to people the government says they have known or suspected terror ties, terrorists themselves. Now, the FBI did respond to this report, saying that it has already made some changes to address the way that names are submitted to that list, that the gaps identified in the report should be fixed within six months -- Fred.

WHITFIELD: All right. Kelli Arena, thank you, from Washington -- Don.

LEMON: Camping out in the great outdoors sounds like a whole lot of fun, right? Well, not if you had to give up your dream home for a camper. We'll take you one couple's version of camp foreclosure.

(BUSINESS REPORT)

(COMMERCIAL BREAK)

LEMON: The road to foreclosure, many American families have already arrived. Many more on their way owing more than their homes are now worth.

CNN's Thelma Gutierrez introduces us to one couple who had to give up their dream home for the not-so-great outdoors.

(BEGIN VIDEOTAPE)

THELMA GUTIERREZ, CNN CORRESPONDENT (voice over): High in the mountains, behind a white picket fence, is space number 96, a place Bill and Vicki McCue now call home.

BILL MCCUE, LOST HOME TO FORECLOSURE: What you see here, our fireplace, our fountain. This was all part of our house decorations.

GUTIERREZ: This was the 2,700 square foot home the McCues once owned in Las Vegas that went into foreclosure. This is the 28-foot camper trailer they now own.

(on-camera): What is it like living in a camper?

B. MCCUE: The two sides of it -- number one, it's beautiful. Number two, it's insulting, because I worked very hard all my life to get where I had gotten, and I wound up here.

GUTIERREZ (voice-over): A camper that leaks when it rains and is designed more for weekend getaways than full-time living.

B. MCCUE: This is not what I had planned, to be 50-years-old and wind up on a little lot for the rest of my life in a little camper.

VICKI MCCUE, LOST HOME TO FORECLOSURE: And here is our bathroom.

GUTIERREZ: They say living here has been a huge adjustment.

V. MCCUE: Up in here, our desk. In here, food. My kitchen before was huge. I had granite countertops, stainless steel appliances.

GUTIERREZ: The McCues thought they were doing everything right. They worked full time. He was a technician at a five star casino, she was an administrative assistant. They were ready to buy their dream home.

V. MCCUE: We walked in and it was like, we can get this for $265,000, no money down, oh my god.

GUTIERREZ: Soon, their home nearly doubled in value.

(on-camera): So for a while, you were sitting on mountain of equity in your home?

B. MCCUE: Yes.

GUTIERREZ (voice-over): Then Vicki lost her job. They took out equity and their payments went up 57 percent to $1100 a month. The McCues decided to sell.

The buyer fell through, so they took out a $35,000 emergency loan to help pay the mortgage.

(on-camera): What would you say to the money people on the other end who are going, yes, but you wanted free money. You signed the loan documents, you knew that it was interest only loan, you should have read the fine print and you shouldn't have signed that loan. What would you tell those people?

V. MCCUE: I would tell them they shouldn't have lied to us on the phone and convinced us that that was the way to go and that our payment wouldn't go up more than $100 each year, per month.

GUTIERREZ: Did you read the fine print?

V. MCCUE: The way that they word things, it's not real clear. It's not real straightforward and you put together what you're being told with what you're reading --

GUTIERREZ: So you were trusting the people who --

V. MCCUE: We were trusting the people because they kept telling us this is the only way to go.

GUTIERREZ (voice-over): The McCues say they were just trying to build for their retirement. In the process, lost it all.

B. MCCUE: It hurts because you worked so hard and you don't expect this to happen. It's -- it hurts emotionally, it hurts physically. I didn't cause this to happen, others caused and nobody cared. Everybody just walked away.

(END VIDEOTAPE)

WHITFIELD: Heartbreaking.

Well, this is happening many times over, from ordinary Americans to a big time investment bank now -- we're seeing all caught up in the mortgage meltdown. The government OK'd the buy out of Bear Stearns and a fraction of its earlier worth to try to avert all-out panic across the financial world. Well, is it going to work? And what does it mean for your wallet?

Let's bring in Neil Irwin, nationally economy correspondent for "The Washington Post."

I want to talk to you about a lot of things, from the banks to what we see with Bear Stearns. But let's start with the foreclosures. Coming out of that piece, it is heartbreaking because really that could be anyone. So many people took advantage of interest-only loans and then found themselves in the same situation as that couple. So do we feel like we're at the tip of the iceberg of the whole foreclosure mess, or is the worst over?

NEIL IRWIN, THE WASHINGTON POST: The worst isn't over -- 2008 -- throughout 2008, there's going to be a lot of foreclosures. It's just -- if you look at the numbers of when a lot of these risky loans were taken out, they're resetting now and there's going to be at least one million, maybe two million of these happen this year, which is going to be very ugly.

WHITFIELD: OK. Which means, the ripple effect is, so many banks, just like Bear Stearns, who helped front a lot of those kinds of loans, they are going to be in trouble.

IRWIN: That's right. And what you're seeing now is kind of a vicious cycle setting in, a self-reinforcing cycle. You have -- the problems in the credit markets and in the financial markets that are causing people to lose their homes and hurting the economy.

People losing their homes and hurting the economy in turn causes more losses in the financial system and causes more investment banks to lose money. So it's an unfortunate cycle that's set in and that's what federal policy makers are trying to stop.

WHITFIELD: And then -- you can just ask anybody these days, if they look at the 401(k), for instance, activity, everyone is losing not hundreds, not a few pennies, but thousands of dollars. So, I guess a lot of folks might be wondering, where is their money safe? Is there a place where they can gain some earnings on their money?

IRWIN: Well, there's two kinds of people. If you're a long-term investor, if you're saving for retirement that's many years away, most investment advisers would say, buy in whole. Don't try to trade in and out of stocks, don't try and time the market, just be patient.

Now if, on the other hand, this is money that you need to use soon, if it's money that you plan to use in the next few years, you're either about to retire or you have a big purchase coming up, then it might make sense to have that money in a safer investment, maybe in a money market fund, government bonds, something that's -- a regular bank account, something where you can convert it to cash and aren't at risk of losing more money if this thing gets worse.

WHITFIELD: We're hearing tomorrow, as early as tomorrow, what lowering of interest rates on discount, I guess, rates for banks who are in this very quandary who need to borrow. Does this mean that after Bear Stearns, there just really may be a few other banks that we all know, that we've come to respect for many, many years -- might be on the verge of going belly up as well?

IRWIN: Well right now the biggest problems are not with regular commercial banks, the kind that are on the corner down the street that you go and deposit your paycheck in. Those commercial banks are in generally in pretty good shape.

What we're talking about right now are investment banks. The firms that buy and sell stocks and bonds and more exotic securities. Several of those are at risk. Their stocks were down a whole lot today. People are worried that if Bear Stearns can go under this quickly, what about some of these other firms, Lehman Brothers, Goldman Sachs, UBS.

Now, that said, the Federal Reserve, yesterday -- last night did this extraordinary move to essentially make a bottomless pit of money available to those kind of institutions in exchange for putting up collateral. The idea being to set a floor under this and say, we're not going to let these guys go under, we're not trying to let a massive crisis in the world financial system set it.

WHITFIELD: Neil Irwin, "Washington Post," thanks so much. And, real quick, before I let you go, any insight of what we should expect Henry Paulson to say, treasury secretary, after his meeting with the president there in Washington?

IRWIN: We should expect him to stress that this is an effort to protect the integrity of capital markets and the safety of the economy, not -- he will insight that it's a bailout of one company.

WHITFIELD: All right. Neil Irwin. Thanks so much for your time.

IRWIN: Thanks, Fredricka.

WHITFIELD: Don?

LEMON: We're going to do this after -- after the question. But can we take this now, Scottie (ph), that shot of the White House. Those microphones are sitting there because -- Fredricka just mentioned Henry Paulson meeting with the president, right Fred. Obviously yesterday -- he's defending his decision on Bear Stearns, defending the bailout of Bear Stearns yesterday.

Made the rounds on the talk shows. He's meeting with the president right now. So microphones set up in front of the White House. He's going to come out and talk and address the media. Treasury Secretary Henry Paulson.

As soon as that happens, we'll bring that it you. It is issue No. 1. Of course, we'll bring that to you, right here in the NEWSROOM.

Also, we want to hear from you, in the NEWSROOM, as well: How is the economy affecting you, your family, and your wallet.

Fred, here's what Rick says. He's from Missouri. He says: "I have to cut out all discretional spending except for cable and Internet. No movie rentals, no pay per view, no restaurant meals, no weekend trips, etc. I think I'm going to need every spare dime just to afford to drive to work and back."

WHITFIELD: Wow. It's a harsh reality.

And this from Tom and Pennsylvania: "The rising cost of gas and oil prices have stopped me from purchasing a new home as well as going away on vacation. More money needs to be conserved for basic living."

LEMON: And from Mary in Ohio: "We had to choose this month on paying our mortgage of buying gas to get to work" -- wow -- "in order to have money left to buy food and pay utilities. The first time in 15 years we've missed a payment and it appears it won't be the last."

E-mail us at CNNnewsroom@cnn.com. We'll read more of your comments a little bit later on this afternoon right here in the CNN NEWSROOM.

Sad, sad.

WHITFIELD: It is sad. And it's very harsh. And -- Neil was suggesting to us, and I think you have to believe it, that we really are at the tip of the iceberg. More bad news likely in the economy sector, mortgages, et cetera, it's on the way.

LEMON: We're reporting on this all day.

WHITFIELD: Yes.

All right, meantime, from China, the deadline for Tibetan protesters to surrender comes and it goes. So what is Beijing's next move going to be?

(COMMERCIAL BREAK)

LEMON: Live now to Washington, D.C. You see the big shot of the White House there on the right. On the left, the podium set up for Treasury Secretary Henry Paulson.

He's inside meeting with President Bush now talking about the economy. As soon as he comes out to make a comment, we'll bring it to you right here on the CNN NEWSROOM.

WHITFIELD: Thousands of Chinese troops reportedly flooding Tibet's capital ahead of Beijing's deadline for Tibetan protesters to surrender or else. That deadline just passed at noon Eastern. Amid the turmoil, China has barred CNN journalists from entering tibet.

Our John Vause filed this report from neighboring Sichuan province.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (on-camera): This is the main road north to Aba County (ph) in Sichuan province where Tibetan exile groups say over the last few days, there have been deadly clashes between Chinese security forces and monks and protesters, leaving more than 30 people dead, including women and children. There is no way to independently confirm those reports.

In fact, local police there say the situation is calm and in their words, everything is fine. But clearly, a troop buildup is underway. On the way here, we passed at least five military trucks, three of them were carrying heavily armed soldiers and the license plates on all those vehicles had been partially concealed to hide the identity of those units and where they were from. The reason for that, we just don't know.

Also, according to Tibetan exile groups, earlier on Monday, hundreds of troops who have flown in on helicopters to Aba County -- once again, we can't confirm that. But earlier, we saw two military helicopters flying overhead. Now, the reason why we're using the night vision, the green image that you're seeing, is because we're trying to keep a low profile. To simply get this far, we had to pass through four police checkpoints. I was in this region about a year ago. Back then there were no roadblocks. So obviously right now the Chinese authorities are trying to control who gets in and who gets out.

There's also a lot of speculation here. One rumor has it that as many as 100 ethnic Chinese have been killed by Tibetans. Also that Tibetans are using dynamite to blow up Chinese-owned businesses and shops. These are just rumors, unsubstantiated rumors, but it is an indication of just how tense the mood is here right now.

John Vause, CNN, Sichuan Province, China.

(END VIDEOTAPE)

LEMON: A female suicide bomber blew herself up today in Iraq, killing at least 33 people. The bomber apparently targeting a group of Shiite worshipers, not far from the Oman Hussein shrine in Karbala. A city official says several of the victims were Iranian.

To the north, outside Baghdad, two American soldiers were killed today when a roadside bomb went off during a route clearance operation.

WHITFIELD: U.N. and NATO forces trying to retake a building in northern Kosovo meet violent resistance from Serb protesters this morning. At least 52 police and soldiers were hurt, prompting the U.N. to evacuate its police personnel from the Serb controlled side of the city of Mitrovica.

Several dozen protesters were also injured. Serbian officials quickly accused the peacekeepers of excessive force. This is some of the worst violence yet since Kosovo declared independence from Serbia last month.

LEMON: Pakistani police doing vehicle checks and detaining people for questioning after Saturday's bombing at a restaurant popular with Westerners. A Turkish aide worker was killed, and 12 people wounded, four of them, FBI agents.

A high-ranking federal source told CNN over the weekend, it's not believed the agents were specifically targeted. Pakistan has seen a wave of bomb attacks lately. Today, a police building in the country's northwest was also hit. State media says three officers were killed.

WHITFIELD: A suicide bomber rammed a NATO-led convoy in southern Afghanistan today killing at least seven people. The victims, one Czech and two Danish soldiers, three Afghans and a NATO employee. The group was on its way to monitor a school project.

Yesterday, a Canadian soldier died in a explosion in neighboring Kandahar Province. This southern region has seen a surge of attacks by Taliban fighters this year. LEMON: Back now, live pictures of Washington, D.C., and specifically, the White House. Because, in a few minutes, the treasury secretary, who is meeting with President Bush to talk about -- they're talking about issue No. 1, what is on everyone's mind. We're talking about the economy and the economic slowdown.

The treasury secretary will come out in just a few minutes and make a speech. We'll bring it to you here in the NEWSROOM.

WHITFIELD: And -- we're just now learning out of New York now, confirmation now that a seventh and final victim has been found, located in the rubble of that crane accident in Manhattan. Tragically, now, from this accident, taking place on Saturday, seven people have died from this horrible accident there, right in midtown, Manhattan. Of course, when we get more information on it, we'll be able to bring it to you.

(COMMERCIAL BREAK)

WHITFIELD: All right. Money is on the minds of President Bush and Treasury Secretary Henry Paulson. They're wrapping up their meeting with Fed chairman, Ben Bernanke, there at the White House.

And momentarily, they'll be emerging to share their thoughts and news to everyone else to those microphones right there on the left. And when that happens, we'll take you there live.

LEMON: Meantime, we go now to show business. There has been mudslinging for months now, but finally, finally it is over. Paul McCartney and Heather Mills have reached a financial agreement. And entertainment correspondent, A.J. Hammer, joins me now with all the details of that divorce.

A.J., this was -- mudslinging to say the least. It got a little nasty.

A.J. HAMMER, CNN ENTERTAINMENT CORRESPONDENT: It did get a little nasty. And the economy, Don, not really a problem for Heather Mills today.

LEMON: Not for Paul McCartney either.

HAMMER: No, I would say so -- $48.6 million is what Paul McCartney's former wife, Heather Mills, is getting after all that mudslinging. When the divorce settlement is all done, papers are signed today, a British family court released that information.

Now the divorce agreement shows Mills being awarded a lump sum of $33 million, plus she gets the assets that she currently holds, that's worth about $15.6 million. Minutes after the judgment, Mills spoke with reporters.

(BEGIN VIDEO CLIP)

HEATHER MILLS, FORMER WIFE OF PAUL MCCARTNEY: I'm basically standing here because Paul is insisting -- insistent on the whole judgment being put out. I've said, if the whole judgment goes out, then all the transcripts have to go out, because it's going to be written in a way that they will try and make it look like I wasn't successful. But all in all, we came out with nearly $25 million.

(END VIDEO CLIP)

HAMMER: She's talking about $25 million in British pounds there. They're just trying to get all the cards on the table. Now, that amount of money, the $25 million in British pounds translates to a little more than $48 million in U.S. dollars.

Sixty-five-year-old Paul McCartney and 40-year-old Heather Mills were married in 2002. They have a four-year-old daughter together. McCartney left the court without making any statement today. His fortune has been estimated at as much as about $1.6 billion, Don. So yes, no real economic worries there.

And Don, I have the abacus out. I was doing a little math.

LEMON: OK.

HAMMER: It comes out to around $40,000 a day, is what Heather Mills is getting, for each day she and Paul McCartney were married, somewhere in the neighborhood of $1,600 an hour.

LEMON: Yes. And she wanted a lot more than that. I don't known how she's going to survive on that.

HAMMER: Yes, I think she'll squeeze by.

LEMON: Real quickly, wasn't the initial -- didn't he initially offer her like $100 million in the beginning and now she only got half of that?

HAMMER: It's difficult to say what was real and what wasn't. A lot of numbers were being floated around. But as she has reportedly said, she was happy with the settlement; Paul's happy with the settlement. So it doesn't look like there's going to be any appeal on the table.

LEMON: And That's all that matters. And we'll take a little if she wants to give it away.

OK. Some great news for one sexy Hollywood star, A.J.

HAMMER: Yes. And one of my favorite actresses in Hollywood, Halle Berry. She had a baby girl yesterday. We couldn't be happier for her. The 41-year-old Oscar-winner gave birth in Los Angeles at the Cedars Sinai Medical Center.

Now so far, she has not released the name of the little girl or any other details, I can certainly respect that. This is the first child for Halle Berry and her boyfriend, 32-year-old model, Gabrielle Aubrey. These two met while they were shooting a Versace ad in Los Angeles two years ago. I spoke with Halle Berry a couple of months ago, Don, and she said she couldn't have been looking forward to motherhood anymore. So we're really excited for her. A lot of people happy for her today.

LEMON: So you just called her up and said, hey, how you doing, what's going on --

HAMMER: Yes, that's how it went. I'm No. 2 on her speed dial next to Gabrielle.

LEMON: All right. So listen -- why is the Supreme Court looking at profanity, A.J.?

HAMMER: Well, there was this lower court ruling that deals, Don, with the use of curse words on the airwaves. And this is actually the first time the Supreme Court is doing a major case on broadcast indecency in 30 years now.

This specific case deals with a Federal Communications Commission policy which fines broadcasters for so-called fleeting expletives. Those are those one-time use of the F words or other expletives that just kind of slip out from time to time on the airwaves. The Supreme Court is expected to hear arguments in the case and will issue a decision on that in October.

Now, coming up tonight on "SHOWBIZ TONIGHT," much more on the McCartney/Mills divorce settlement. Did Heather Mills get what she deserved? And, is it actually still possible that both sides could wind up back in court and air out their dirty laundry?

We will have the big surprises for you tonight on TV's most provocative entertainment news show, it's "SHOWBIZ TONIGHT" at 11:00 p.m. Eastern and Pacific. We look forward to you joining us then.

LEMON: Did you say $16,000 an hour or a day?

HAMMER: It would work out to about $1,600 an hour, $40,000 a day, by my sloppy math.

LEMON: And you did all of that on an abacus?

HAMMER: I learned a long time ago it's best to go back -- avoid the computers and calculators and things like that, and really just get your hands dirty do this.

LEMON: And you're giving up -- you're giving your age away. Because I don't think anyone uses abacuses anymore. Not to be rude.

HAMMER: I don't think anybody used an abacus when we were kids, Don. Let's be realistic.

LEMON: All right, A.J. We'll be watching -- 11:00 Eastern, "Headline" prime. Thank you, sir.

HAMMER: Thank you. WHITFIELD: All right. Well it is the No. 1 issue among Americans, and it's the No. 1 issue today in the White House as well. The economy. Treasury Secretary Henry Paulson discussing the economy and all matters of money with the president and Fed chairman, Ben Bernanke.

Any moment now, either one or all three or at least two -- we know at least the president, will be emerging from those protected doors to share their views with the rest of America. Much more straight ahead in the NEWSROOM here on CNN.

(COMMERCIAL BREAK)

LEMON: Treasury Secretary Henry Paulson fresh out of his meeting with the president.

HENRY PAULSON, U.S. TREASURY SECRETARY: ... the president's working group on financial markets with the president. We gave him an update on what's happening in the markets this morning. He was well aware of the actions that were -- took place over the weekend, because I had a couple conversations with him and most of them this week, definitely went along here.

We talked about the markets, emphasized the priority is the orderly function of our capital markets, talked about the strength of our financial institutions, and he was, I think, generally quite pleased with the actions that were taken, as are we, given the way the markets are performing today.

So I will take your -- take a couple comments or questions.

QUESTION: Mr. Secretary, can I ask you just respond to the idea that what was done over the weekend is -- in behalf of Bear Stearns and the general financial community there, is considerably more aggressive than actions taken on behalf of homeowners facing foreclosure.

PAULSON: Which is the -- is your response that Bear Stearns was treated better than homeowners facing foreclosure?

QUESTION: No, my question is for people out there wondering about the little guy and help available to them from the government, they're looking at this deal and saying --

PAULSON: I got your point. But what I would say is if you would ask the Bear Stearns shareholder in terms of what has happened to their value with that, I don't think any of them would think that this has been a good outcome for them. And when we talk about moral hazard, I would say, look at the Bear Stearns shareholder.

This was -- this is what happens when there is a liquidity problem and there was a liquidity problem. This outcome was much better than -- a filing by them. Again, when we policy makers think through these issues, there's a moral hazard on the one hand, and on the other, there is the importance of orderly markets, stability in our financial system, and this was an easy decision. This is the right outcome, and again, in terms of the moral hazard, look at what happened to Bear Stearns shareholders.

QUESTION: Mr. Secretary, can you talk about whether or not you're rethinking any idea of helping out the housing industry -- I'm thinking of Dodge's legislation or Barney Frank's legislation. And also, a second, would you consider or would you rule out intervening in the foreign exchange markets to stop the slide in the dollar?

UNIDENTIFIED MALE: Can you address the camera, sir.

PAULSON: Yes, I'm sorry. Let me -- let me address both of those questions. First of all, what's going on in the housing market. One of the things I did today was spent 45 minutes with members of the Hope Now alliance, again talking about initiatives there to avoid preventable foreclosures. But to get more specifically to the question, what I'm really focused on are things that can be done quickly that make a difference.

And -- so although there's some interesting ideas up on the Hill, we still don't have FHA modernization. It's -- we sent the legislation up there a long time ago. It's been passed by the House and by the Senate. We still don't have legislation on the president's desk, which would help 300,000 homeowners, and that's a big number of the subprime homeowners facing foreclosure, a big percentage, No. 1.

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