Return to Transcripts main page

CNN Newsroom

Will Another Interest Rate Cut Help or Hurt Consumers?; Barack Obama Gives Major Speech on Race Issues; Supreme Court Addresses Second Amendment Rights; Home Construction Rates Down

Aired March 18, 2008 - 13:00   ET

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

WILLIS: That's not going to work for me. I like buying mine maybe in a store.
VELSHI: All right. Well, for those of you who don't want to mine for gold, keep watching us. We'll give you other suggestions.

WILLIS: Exactly. Across America, the economy is "Issue No. 1." We're here all week, same time, same place, 12 p.m. Eastern, right here on CNN.

VELSHI: Get ready for the latest news from Don Lemon and Fredricka Whitfield in the CNN NEWSROOM, starting right now.

DON LEMON, CO-HOST: Race in America and the race for the White House through the eyes of a man who could be the first black president.

FREDRICKA WHITFIELD, CO-HOST: Barack Obama makes a soul- searching speech about age-old wounds, a more perfect union, and the mentor he can't disown.

Hello, everyone. I'm Fredricka Whitfield, in for Kyra Phillips today at the CNN world headquarters in Atlanta.

LEMON: And I'm Don Lemon. You're in the CNN NEWSROOM.

And up first today, the Federal Reserve faces off against its economic enemies, and it's going on the offensive next hour with a likely and -- likely big -- interest rate cut.

Plus, a battered market, a bleak future. The latest housing numbers are out, and they're far from constructive.

Also, size of relief and size of a rally as shaky investors try to ease their jitters. From Washington to Wall Street to your street, the economy is, of course, "Issue No. 1."

Chances are most of you watching aren't monetary policymakers, or big-time investment bankers, or jittery Wall Street traders. You're just trying to save money, find a cheaper loan or protect your retirement and protect your assets. So will another interest rate cut help you, or will it hurt you? Straight to our senior business correspondent, Mr. Ali Velshi.

Ali, "Issue No. 1." VELSHI: Issue No. 1.

LEMON: A big one.

VELSHI: Let's tell what you this is about. We are looking at a range from a half a percentage point all the way to a full percentage point. At 2:15 Eastern we will be with you live to tell what you it means.

But let me tell you what a rate cut does. Obviously, when interest rates come down, it makes money cheaper to borrow. It means businesses can expand. They can hire more people. Individuals can save, because they have lower rates on their adjustable rate mortgages, and with all that money that it creates, people theoretically go out and spend more. And that's how the cycle begins.

Now here is what will happen. After 2:15 when we get our announcement, within the next hour or so, Don and I will be with you all afternoon. We'll be announcing to you that the banks are cutting their prime rate. The prime rate is always three percentage points higher than the Fed rate. So right now the Fed rate is 3 percent, which means the prime rate is 6 percent. So many of you have loans, credit cards, things like that that are tied to prime. You will get a discount as of this afternoon.

Adjustable loans will cost -- will cost less, but the dollar will sink again. We have seen the dollar in some of the lowest levels that we've seen in a very long time.

Now the problem with that, of course, is that a lower dollar causes inflation. It means that the things we buy so much of what we buy from overseas, including oil, will get more expensive.

Inflation causes bond rates to rise. We don't have to get into why, but they do. And that means that fixed mortgages, which are set in the bond market, could actually rise. They're tied to bonds. So the Fed cutting rates could make your fixed mortgage price go higher.

Take a look at where fixed mortgages are. Last week in the United States, if you had good credit, a fixed mortgage running at 6.37 percent. That is up substantially from a month ago; 15-year arm (ph), 5.72; and a one-year arm (ph), 6.72. So really not a good reason to get an adjustable rate mortgage.

I have spoken to a number of people today who have good credit and say that they are able to secure a 30-year mortgage for about 5.75 percent. That's pretty good, Don, because as far as I recall the lowest rate in 40 years has been about just a little under 5 percent, about 4.99 percent. So 5.75 percent not bad for a mortgage.

But that is how a Fed rate cut is going to affect you.

LEMON: Ali Velshi standing by. Ali, we'll check back with you when that happens. Thank you very much.

What is in your best interest? We'll answer that question all afternoon amid the flurry of economic headlines. We're counting down to a likely interest rate cut by the Fed.

Plus, our T.J. Holmes talks to people who are on their lunch hour to chew on the economy. And we'll tell you what the latest housing numbers mean for your home and your mortgage. It's all straight ahead right here in the CNN NEWSROOM.

WHITFIELD: Democratic presidential frontrunner Barack Obama moves to dampen a political firestorm. A short time ago in Philadelphia, Obama delivered a major speech on race in America. He spoke just days after racially-charged sermons from his former pastor, the Reverend Jeremiah Wright, surfaced on the Internet.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The remarks that have caused this recent firestorm weren't simply controversial. They weren't simply a religious leader's efforts to speak out against perceived injustice. Instead, they expressed a profoundly distorted view of this country; a view that sees white racism as endemic, and that elevates what is wrong with America above all that we know is right with America.

(END VIDEO CLIP)

WHITFIELD: Our Suzanne Malveaux joins us now from Philadelphia.

And Suzanne, what a huge burden that had to rest on the shoulders of Barack Obama. You have to wonder if this is something he felt that he wanted to do or something he had to do, which essentially is explain or talk about or dissect what is the elephant in the room: race.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, he knew that he was going to have to talk about it at some point in his campaign, but it became very, very clear over the weekend that he was going to have to address it sooner, as opposed to later.

And that this is a speech that he largely wrote himself, that he spent the weekend and up until this morning, really, trying to figure out a way to put this all of this into context and perspective here. It was about race. It was about the pain and anger of black people in this country, of white people in this country, the difficult relationships.

And he also talked specifically about Reverend Wright, his former pastor, once again repudiating some of the more controversial comments, the criticism of the U.S. government that was coming from him. But then also trying to relate this, in a way, to make people understand why it was he had this nearly two-decade-long relationship with this man, the fact that he is a product of a multi-racial family.

He made a parallel, even a very personal parallel, saying he could not give us his relationship and condemn his pastor. It would be the same thing like he would give up or condemn his white grandmother, who had said some things that he said, racially, that made him cringe. There was another element to this speech, as well, Fred, and that was really kind of looking forward, almost like a preemptive strike here. So a lot of unanswered questions about his relationship with Wright, perhaps more tapes of incendiary remarks. And this is how Barack Obama addressed it.

(BEGIN VIDEO CLIP)

OBAMA: Did I know him to be an occasionally fierce critic of American, domestic and foreign policy? Of course. Did I ever hear him make remarks that could be considered controversial while I sat in the church? Yes. Did I strongly disagree with many of his political views? Absolutely. Just as I'm sure many of you have heard remarks from your pastors, priests or rabbis, with which you strongly disagree.

(END VIDEO CLIP)

MALVEAUX: And Fred, that really is a look ahead at the -- possibly, at the general election, if there are other things that come about, this controversy continues to bubble up. Those are the kinds of comments that he really essentially wants to nip it in the bud.

But the campaign is not naive enough, Fred, to think that this is simply going to go away. They say this is an opportunity for him, yes, to answer those questions, specifically about his pastor, to bring up the larger issue of race.

But also, they say, it's just the beginning of this discussion. There are a lot of people who are uncomfortable when you talk about this subject. This is something that they anticipate he's going to need to talk about during the duration of the campaign, Fred.

WHITFIELD: All right. Suzanne Malveaux, thanks so much from Philadelphia.

And of course, we're going to talk more about Obama's speech. Our political roundtable will talk a lot more about what was said on race in America in our 3 Eastern hour, right here in the NEWSROOM.

Hillary Clinton also in Philadelphia today. She's scheduled to deliver a speech at the bottom of the hour. We'll have live coverage for you on her speech. The Clinton campaign considered Pennsylvania's April 22nd Democratic primary a must-win.

Issues of race have colored this year's presidential campaign. So how do you think candidates are handling this dialogue? Send us video responses and share your points of view at IReport.com. Turn on your digital or your cell phone camera and record yourself sounding off, or include a picture of yourself with your thoughts and then send it to IReport.com.

LEMON: All right. Brace yourselves. Another day of potentially dangerous storms. A busy Chad Myers is on top of all the watches, all the warnings.

We don't need that in the south, Chad.

CHAD MYERS, CNN METEOROLOGIST: No, this is Arkansas, Texas, Louisiana, maybe even into Memphis later on tonight. And this is a very dangerous situation today. There's a lot of energy. There's a lot of humidity in the air. These storms are firing right now.

Ozarks -- now, this is Ozark, Arkansas. You are under the gun. This is Franklin County. You are under the gun with a tornado warning. A lot of spin with this storm. And I'm afraid storms are going to be spinning all day long. This warning is in effect until 12:45 Central Daylight Time.

Another thing going to go on, not only tornados but a lot of flooding. We have massive flooding across Missouri, into Illinois and Indiana. Some counties are completely underwater. We're talking about six inches of rain in the past 12 hours across parts of the Deep South.

So it is going to be a busy day for us. We'll stay on top of it for you.

LEMON: All right. We'll be checking back. Thank you, Chad Myers.

MYERS: You're welcome.

WHITFIELD: All right. The U.S. Supreme Court sets its sights on a case more than two centuries in the making. Justices will try to agree on the meaning of the Second Amendment: the right to keep and bear arms, in deciding a challenge to the District of Columbia's handgun ban.

Justice correspondent Kelli Arena is following this story from Washington -- Kelli.

KELLI ARENA, CNN CORRESPONDENT: Well, you know, this is truly one of the biggest cases to go before the Supreme Court in years. And it really was not lost on the general public. People literally slept outside the Supreme Court last night to guarantee a seat in that courtroom today. Hundreds were lined up this morning as early as 4 a.m. in the morning.

And as you said, the issue, the Second Amendment, whether it guarantees an individual right to own a gun.

Inside that courtroom -- I was there -- lots of very spirited debate. It was part legal argument, part history lesson, part grammar lesson. It was a great deal of discussion about, of course, the Second Amendment and its intent.

There was also a lot of discussion about what role, if any, the government should play in regulation and whether the D.C. handgun ban is what you would call "reasonable."

Now lawyers from both sides really seemed to play to the middle of this argument, Fred. And that was willing to go along with the idea that there's a basic right to own a gun and there is a role for government regulation. The real question, though, seems to be how far can the government go in that regulation? We'll see what they say.

WHITFIELD: And it's always tough to know when the justices will make a ruling. But what's the guess?

ARENA: We do expect by June this summer, which of course puts it right there in the middle of this campaign. So sure to be a campaign issue when we do hear a final ruling.

WHITFIELD: All right. Better believe that. All right. Kelli Arena, thanks so much, from Washington.

ARENA: You bet.

LEMON: Tough times for a battered market. We'll find out more about the downturn in American housing and what it means in the big picture.

Plus...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (speaking foreign language)

KYRA PHILLIPS, CNN ANCHOR: A tongue of ox? Oh, boy.

(voice-over) Hassan says not only will this help me sleep, but it will relax my entire nervous system.

(END VIDEO CLIP)

WHITFIELD: Iraqis who can't get modern medical care turn to an age-old tradition. Our own Kyra Phillips meets an Iraqi medicine man. So join us from Baghdad with the story.

(COMMERCIAL BREAK)

WHITFIELD: All right, 15 minutes after the hour. Here are three of the stories we're working on in the CNN NEWSROOM.

Storm warnings posted across a big chunk of the country as people in the south and central U.S. face another day of potentially dangerous weather. Included in the mix: heavy rain, tornado threats and snow.

And protests and crackdowns in Tibet. Chinese forces and Tibetan protesters are still clashing in the streets. China blames supporters of the Dalai Lama for the violence. The Dalai Lama denies it.

And it's a case that goes to the heart of the Second Amendment, and it's before the U.S. Supreme Court today. The issue: does Washington, D.C.'s strict and sweeping ban on handgun ownership violate the Constitution?

LEMON: Fewer homes being built, fewer homes being planned. The latest government numbers show a drop -- a drop in home construction, a plunge in building permits and more bleak times for a battered market.

Let's take a look straight ahead now with Gerri Willis.

Gerri, of course the big question, what does this mean for the economy?

WILLIS: Yes. Well, the monthly number, it really doesn't mean that much. That's because monthly housing starts can be really volatile, affected by even the weather.

Now, if you drill down, there are interesting numbers here. One interesting indicator: single-family housing starts were down 6.7 percent from January. That's the lowest level in 17 years.

Now, at the same time multi-family start, except apartment buildings, were up 14.4 percent. Now one analyst we talked to says that's probably because of apartment construction, spurred by the number of people losing their homes to foreclosure and needing rental apartments.

Also building permits, which aren't affected by the weather, were down for both single-family and multi-family buildings. So, while it's hard to say what this means for the economy, it's not a glowing report.

LEMON: OK, Gerri, I never thought about that, more people needing apartments.

WILLIS: Lots of details.

LEMON: Yes, that's interesting. Because a lot -- I see in lots of cities, lots of multi-family dwellings going up and people probably renting instead of buying.

WILLIS: Right.

LEMON: That's all they can afford. OK. Very good point there.

So what else? What should viewers be looking at right now to see what's going on with the economy?

WILLIS: Well, for all us consumers out there, one big item: inflation. The Labor Department reported today that core inflation for wholesale goods, up 0.5 percent in February. Now, this affects the price of things you buy every day. Outside of energy and food, it's inflation that's built into the economy, and it's a key indicator of where the economy is going. It's an input into everything. When you're shopping, when you're in the mall, wherever you go, you pay for that.

Also, keep an eye on interest rates. The Federal Reserve is expected to cut its key interest rate by up to one percentage point in the next hour. Now, we know that people are really worried out there about the economy right now. The best thing to do: sit back, take stock of what you own, what you don't own, what your debt is. Make sure your investments are diversified and that you're paying off that debt as quickly as possible. And of course, Don, don't panic.

LEMON: Don't panic.

WILLIS: Right.

LEMON: That's good advice. It's easy to say, right? Always easy to say.

WILLIS: Easy to say, but you should see our e-mail inbox. I'm telling you: people are nervous out there. And the reality is that we have times like this. We've had them in the past. We weather them. You've got to have some confidence.

LEMON: Yes, you're right about that, because we've been taking questions here, as well, in the CNN NEWSROOM.

WILLIS: Yes.

LEMON: And some of the stories are just heartbreaking, Gerri Willis. I agree with you on that. Thank you very much. We always appreciate your advice.

WILLIS: My pleasure.

LEMON: The economy is "Issue No. 1," 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" at 12 p.m. Eastern.

Also, the Fed rate -- 2:15, I'm sorry. The producer's telling me.

Say again, Katie?

OK. At 2:15, we're going to have the Fed rate. We're expecting a possible 1 percent cut -- and -- percentage point cut, I should say. And you heard that from Gerri Willis just a short time ago. But at 2:15 the Fed rate cut -- possible Fed rate cut. We'll bring it to you right here in the CNN NEWSROOM.

WHITFIELD: A doctor shortage in Iraq means a book in unconventional medicine. Our Kyra Phillips introduces us to a healer reviving ancient traditions.

(COMMERCIAL BREAK)

WHITFIELD: Less than an hour from now, the Federal Reserve will announce its decision on interest rates. To help the economy, the central bank has been doing a lot more than just cutting rates, however.

Stephanie Elam is at the New York Stock Exchange with a look at all of this.

Hi, Stephanie.

STEPHANIE ELAM, CNN CORRESPONDENT: Hi, Fred.

Yes, the Federal Reserve has been active lately. They've been pulling out all the stops to help the economy, and exactly six months ago today, the Fed actually began cutting those rates. The Fed funds rate has dropped from 5.25 percent to where it stands now at 3 percent. And of course, we're expecting it to go a lot lower today. Most analysts expect a cut of at least three-quarters of a point.

Now in addition to cutting rates, the Fed has also teamed up with central banks around the world to provide struggling financial institutions with more capital.

And on Sunday, you may remember that we heard that the Fed made a move to extend lending beyond commercial banks to Wall Street firms. It also supported JPMorgan's buyout of Bear Stearns by putting up $30 billion in guarantees. That made Wall Street feel a lot better to know that it wasn't just the companies that are going to be liable for this money. The Fed is coming in and saying, "Hey, we can stand behind this. This deal is a good thing for the overall marketplace."

WHITFIELD: OK. So will that be enough, though, to help the economy overall?

ELAM: Well, you know, some critics say the Fed can't actually address the fundamental problem, which is that investors are just plain freaked out. We all hear how much that is the case here.

And also if you look at the markets, how we're up, and then down, and then up. And it shows that there's a lot of fear around here.

One economist even says that when the Fed takes action on the weekend, as it did just two days ago, it shows just how worried policymakers are, and that rattles the markets even more.

But other analysts say the Fed is on the right course, and we need to be patient, because it takes time for all those actions to work their way through the economy. Patience.

Well, look at this. For the moment, Wall Street is betting that another rate cut will help. Stocks are rising sharply, thanks to a rally in financial stocks, this after Goldman Sachs and Lehman Brothers reported better than expected quarterly results.

So the Dow Industrials now up over 3.5 points, up 2.5 percent, at 12,279. NASDAQ better by 62 points to 2,239. So that's a gain of more. It's close to 3 percent there. The S&P is up over 3 percent.

So right now, well, you can definitely say that we're looking for a cut here that will be a nice deep one.

And coming up in the next hour, the Fed's decision. How aggressive will it be in cutting interest rates? We'll bring it to you live. I'll find out right around 2:15 Eastern Time. And then we'll know exactly how things will shape up, and we'll track the markets after that, Fred.

WHITFIELD: All right. Sounds good. Nice to see a little rebound before the news is actually made official.

ELAM: Exactly.

WHITFIELD: All right, Stephanie, see you soon -- Don.

LEMON: Your wallet, Fred, your well being, the two are indelibly linked. The economy is "Issue No. 1," and we're hitting the streets to find out what's on your mind, what's in your wallet?

(COMMERCIAL BREAK)

LEMON: All right. The Fed's going to help you out with your savings, with your 401(k), with interest rates for loans. We'll find out in about 45 minutes. At 2:15 the Fed's expected announcement. And we're expecting -- this is according to our financial folks -- a possible financial rate cut from the Feds. As soon as that happens, we'll bring it to you right here in the CNN NEWSROOM.

And also -- also, our T.J. Holmes is out, and he's getting a pulse of people who are everyday folks, who are out having lunch today, to see what's on their mind and what they're doing to save. We'll check in with him just a little bit later on -- Fred.

WHITFIELD: All right. Meantime, the other big issue on the minds of voters: Iraq.

Violence in Iraq claims six more lives today, in fact. A car bomb exploded outside the electronics store in Mosul, destroying the building, killing three people and wounding 40. A roadside bomb in Baghdad killed three people and wounded seven more. And four Iraqis were wounded in a separate roadside bombing in the capital.

The death toll is rising from yesterday's attack in Karbala. Fifty people were killed by a female suicide bomber who apparently targeted Shiite worshipers before evening prayers. Seventy-four people in all were hurt in that incident.

So with doctors in short supply or fleeing the violence in Iraq, patients there are turning to an ancient form of medicine. Our Kyra Phillips is live in Baghdad with this very fascinating story.

Hi, Kyra.

PHILLIPS: Hi, Fred.

Eight thousand doctors have either fled Iraq, or they've been killed. And so Iraqis are looking for other choices for health care. It's simply in crisis here. So they're turning to herbal remedies. It's interesting, because it's cheaper; it's easier to get; and they say it's working.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): Tucked away in this old Baghdad alley, an ancient tradition thrives -- herbal remedies for the sick and suffering. Herbal therapist Hassan Jabbar (ph) says he can help with skin disease and prostate cancer, aching joints and acne, kidney stones and low sex drive. Whatever your ailment, this Iraqi medicine man has your cure.

"I used to take diabetes tablets and they didn't work. When I use this herbal medicine, my high levels of blood sugar dropped."

"I have kidney stones and my doctors cost me a lot of money. So I turn to herbal medicine. After 15 days, I felt a difference."

Hassan produces his potions through the pages of "Abasina's (ph) Ancient Practice." Iraq's most famous philosopher, spiritualist and scientist, who died nearly 1,000 years ago.

(on camera): Why do you believe in Abasina?

(voice-over): "He wrote about all types of herbs, their uses and treatments. He has so many amazing remedies. Every herb can be used to treat four to six infections and diseases."

Herbal practice has been in Hassan's family for decades.

"I never let any chemicals enter my house, only herbs."

(on camera): You never use any type of medicine besides herbs?

(voice-over): "Only for emergency cases like surgeries.

I decided to seek out the secrets. I have a lot of trouble sleeping.

However, Hassan says, he can help me.

"We will start with the al-hetma (ph) flower. This is used to resist stress and help with sleep."

He then adds spence (ph) seed, piala (ph) seeds and mawi (ph) flower.

(on camera): The tongue of ox? Oh, boy.

(voice-over): Hassan says not only will this help me sleep, but it will relax my entire nervous system. He adds the last two herbs, fencine (ph) and kajara (ph).

(on camera): What's kajara for?

(voice-over): "It's an ancient Arab medicine. Men used to carry it with them all the time for the flu, reducing stress and helping to sleep. But above all, high blood pressure."

Hassan buys these herbs from Iraq, India and China. Mixing in this mortar, a cross-cultural cure created from centuries of belief.

Meanwhile, back at Hassan's House of Herbs, Oils, Prayers and Potions, his faithful flocks, waiting for his modern-day miracles.

(END VIDEOTAPE)

PHILLIPS: And, Fred, Hassan actually told me that doctors are now sending him patients. Now, as for the sleep remedy, I can tell you it worked. As for my producer, Mohammed (ph), well, he took double the dose and not only did he sleep through the night, but he also slept through the next day. So you have to be very careful with how much you use. So...

WHITFIELD: So wait a minute, did you take it in like a tea form? I was so curious as to how are you getting all that little herbal concoction into you?

PHILLIPS: Exactly. It's like herbal tea. You just take a little bit, you put it through -- you siphon it a little bit in hot water and there you go.

WHITFIELD: Yum yum.

PHILLIPS: A strainer. That's right.

WHITFIELD: All right, yum yum.

PHILLIPS: Add little honey, you're good to go.

WHITFIELD: All right. Well, I'm glad you're now able to sleep through the night.

All right, let's talk about tomorrow. Big, you know, day to mark this five-year anniversary. Some folks are reticent about using the word "anniversary," but a five-year mark of the beginning of this war. How much are people talking about it there on the streets? We know, you know, our military folks do talk about it because they are looking at the calenders, wondering when they can come home. But what about ordinary Iraqis on the streets?

PHILLIPS: I can believe it's five years. Everybody's talking about it actually. Some don't want to think about it as five years. Others say, OK, it's been five years, let's talk about progress, let's talk about the Iraqis taking over their own country.

I mean, I can remember being on the deck of the USS Abraham Lincoln. I remember Shock and Awe night. I walk the streets here and I see where those bombs dropped. And I wonder when that reconstruction is going to happen in so many places. So tomorrow we're going to be live in the international zone, first time we've ever gone live there in five years, and talk to Iraqis, talk to U.S. troops and really look at what has worked and what hasn't worked.

I'll tell you, Fred, the next U.S. president is going to inherit this war, and there is still a lot of controversy surrounding it. It's going to be a huge task to take on, no doubt.

WHITFIELD: All right, that's probably the understatement, isn't it? All right, Kyra Phillips, thanks so much from Baghdad.

LEMON: Let's get you now to Pennsylvania, specifically Philadelphia. Want to show you Hillary Clinton is getting ready to take to the podium there. She's going to have an event in Philadelphia. Do we have that shot? There we go. There's some introduction there. There's Michael Nutter, who's mayor of Philadelphia, about to introduce -- he's at the podium and some other officials standing next to him. But Hillary Clinton, as soon as she takes to the podium and starts her speech we'll bring it to you here.

Meantime we're going to try to get a break in, but when we come back we're going to talk about baby boomers. Do you know your chances of getting Alzheimer's Disease? Well, you'll find out in the NEWSROOM.

(COMMERCIAL BREAK)

LEMON: Got my mind on my mind and my money on my mind, you know that. Well, perhaps the famous rap lyric sums up what you're feeling these days. The economy is issue No. 1, and our T.J. Holmes is finding that out at the legendary Varsity Diner in downtown Atlanta.

T.J., I know you have a little bit of money there so bring us some food back. But what are people talking about?

T.J. HOLMES, CNN ANCHOR: No, people are talking about -- I don't know if you called Yorgich (ph) here on my left. He's actually still working on his BlackBerry while you were coming to us here for this segment.

But, folks, of course -- this is where you find regular, everyday folks, as we all know around here at the Varsity. And this is where we found a collection, a group, here to talk about, I guess, this economy.

And would you happen to believe we ran into somebody, with all the mortgages and the housing concerns these days, ran into a couple of fellows from San Francisco. We know that market out there in California is certainly a scary one sometimes. Your economic issues, one of the first things out of your mouth was your home.

UNIDENTIFIED MALE: Yes, the home. The market crisis is out there, but it's so fluid. We feel that, you know, if we just have patience and stick it out a little bit and don't get all flustered by market increasing by $500,000.

HOLMES: How long is that patience going to hold up for you?

UNIDENTIFIED MALE: It won't hold up more than six to 12 months, I think, from now on. That's right around the time frame when the economy begins to settle down into a recession or not a recession.

HOLMES: And of course jobs are another concern. I walked up and found Herb up here a minute ago in line. And you know, the first thing out of your mouth, it was pretty simple -- what are your economic concerns, and that was?

UNIDENTIFIED MALE: The housing industry. Our whole business is based in, on and around the housing market. And the builders that we did work for, they've just shut down. So I haven't done anything in two weeks.

HOLMES: Tell people again what you do.

UNIDENTIFIED MALE: We do air-conditioning and heating work, we install air-conditioning and heating systems in new homes, and that's the whole basis of our business.

HOLMES: And any signs, anything you feel that it is going to be getting better? Like you said, you hadn't done much work in two weeks?

UNIDENTIFIED MALE: Yes, I do. I have faith in the country and the people that run it. I've been watching the people on the end- around round table, George Stephanopoulos, those kind of people, the secretary of Treasury. And I have faith and confidence in those people. This country cannot shut down. It just won't happen. I mean, people can believe what they can't, but I personally don't believe that the leaders of this country's going to let it happen. It is a large country, and it's not going to happen, in my belief.

HOLMES: That's nice hear. You hear some people actually do have confidence. Even though he's having a hard time, still has confidence that they're going to it will get worked out for him.

Here is Jeanne (ph), who I found with a big group of students, students that are waiting on her right now so that they can go on a field trip.

But I wanted to talk to you about your concerns, a teacher for one. A teacher is always stretched and getting strained for this and that. But also your husband just happens to be in a business right now that is getting hit.

UNIDENTIFIED FEMALE: My husband owns a real estate company. And so, yes, it is tight. But we also have faith in the economy and we also hope that the leaders will realize that something has to be done. I think there are a lot of good people out there and I've seen a lot of people in our country coming together and acknowledging people who are struggling right now and trying to help each other. And that's what we're going to have to do.

I know that my husband believes it's going to come around and we also are concerned because when the economy's poor, budget cuts happen in education as well and the programs that mean so much to these children.

HOLMES: Are you sharing some of this optimism we're seeing around the table? It's OK to be a pessimist these days. So, what are you actually feeling these days? UNIDENTIFIED MALE: Well, I mean, there's a certain apprehension. Actually, also just bought my first home about six months ago.

HOLMES: In San Francisco?

UNIDENTIFIED MALE: Unlike my boss, I live further out in the countryside where things are a little more affordable. But it's still a concern, it's still a stretch. We definitely paid more than perhaps we could afford for the house, like many people, and we have a company that's relatively young and our industry's fortunately quite strong, Internet advertising. So, we're confident, but at the same time, there are concerns.

HOLMES: I guess we got your boss here. We could put him on the spot, and see if he'll give you a raise. But times are tough right now, so he can't actually afford one.

But you get a good sense here, Don, you get a good sense of the concerns people have, whether it's jobs, whether it's work, every way and in the housing, it all goes back to her, everything kind of touches everybody in some way, form or fashion. But that's just an idea of what we've been hearing here all day from folks, Don.

LEMON: And T.J., probably the most concerned are those kids behind you, because they want to go on their field trip. You're holding them up, man. You bring them in ...

HOLMES: Yes, they don't want to hear about us. They don't have to pay for the gas money for that bus. They don't care. They're not worried about it. They're like, wrap this up, all right.

LEMON: Yes, or at least get them on camera, sound byte with them or something. All right, T.J. Holmes ...

HOLMES: Yes.

LEMON: ...at the varsity. Thank you, sir. Appreciate that.

HOLMES: All right.

WHITFIELD: Well Don, we want to take you straight to Philadelphia. Earlier, we heard from Barack Obama as he spoke about race. And now, Hillary Clinton has some thoughts.

(JOINED IN PROGRESS)

SEN. HILLARY CLINTON (D), NEW YORK: ... a story that has a basis in fact, but that there is at least one tribe in Africa that when they meet one another on a path, instead of saying, "How are you?" they say, "How are the children?" And I've always been struck by that.

I appreciate greatly being here again with the mayor, whose leadership is acknowledged as being absolutely critical to the future of this city, and certainly his performance in office, both prior to becoming mayor and since, has merited broad support in every community here in Philadelphia. And it is also a great pleasure to be here with two people whom I admire, who have served our country with great distinction and patriotism, and who have stood up for American values time and time again.

I knew that Valerie had gone to Penn State, and I learned today that she is a Philadelphian, which is another great attribute of this city. And I am grateful for her courage and her dedication in both speaking out and in pursuing what is a very challenging road to holding people accountable during the Bush administration.

And similarly, I'm delighted to be here with Ambassador Wilson. He and I did travel together to Africa and, sort of, paved the way for the president's trip the following year, which was historic. And I appreciate everything that Joe has done in serving our country.

Anyone who knows anything about the history of America's relationship with Iraq knows that Joe Wilson was a real hero in taking on Saddam Hussein prior to the first Gulf War and safely getting out all of the Americans under tremendous pressure and considerable danger. And I appreciate his willingness to stand up and speak out despite the personal cost that he has had to pay.

Before I get into some comments about Iraq, I want to start off by saying that I did not have a chance to see or to read yet Senator Obama's speech. But I'm very glad that he gave it. It's an important topic. Issues of race and gender in America have been complicated throughout our history, and they are complicated in this primary campaign.

There have been detours and pitfalls (ph) along the way, but we should remember that this is a historic moment for the Democratic Party and for our country. We will be nominating the first African- American or woman for the presidency of the United States, and that is something that all Americans can, and should, celebrate.

The opportunity for America will be in choosing a president who will best solve the big challenges our country faces. And those challenges are considerable.

We know what is happening in the financial sector and economy of our country, the difficulties that the Fed and others are confronting, attempting to navigate through some very treacherous waters.

We know that we have so many unmet needs.

The mayor and I were just talking about one of them.

Here in Philadelphia, you have seen the closure of I-95, one of the major thoroughfares in our country, closed because of our failure to deal with our infrastructure, something that is long overdue.

And if this is not yet another wakeup call, following the collapse of levees in New Orleans and a bridge in Minneapolis, and now the closure for a couple of days of I-95.

Similarly, we face the very difficult choices posed by President Bush's failed policy in Iraq.

We know that too many of our fellow citizens, like Valerie and Joe, have had their patriotism questioned. They have been maligned as un-American because they believed, in the first instance, that President Bush was waging a preemptive war that was not in America's interests, and now because we believe that our troops should not police Iraq's civil war.

Some have faced great personal cost. Their patriotic dissent has been met with political smear and even retribution.

Well, one thing I can tell the people of Philadelphia, Pennsylvania and America: that as president, I would stand up for the rights of all of our citizens to express themselves, both those outside and inside government, to engage in what is the tradition of patriotic dissent, and to end this war as quickly and responsibly as possible.

It will take a president with the strength and leadership necessary to confront what will be a contentious domestic debate. We've had these debates in our history before -- who lost this country or another, who did not follow through in order to maintain America's position -- and it will take persistence and credibility by the president, acting as our commander in chief, to end our military involvement in Iraq, bring lasting stability to the region, rebuild our military readiness, take care of our veterans, and redouble our efforts against Al Qaeda.

It will take a president and commander in chief who knows our military and has earned their respect.

It will take a president who is ready on day one.

If given the honor of serving, I will be that president.

I have been privileged to serve for five years on the Senate Armed Services Committee. I have been to Iraq and Afghanistan, meeting not only with soldiers and military leaders but officials at all levels of the Iraqi government.

I have done my homework on the Armed Services Committee, in attending countless meetings and hearings, challenging high-ranking Pentagon officials and military leaders, investigating the situation in Iraq and demanding answers to tough questions.

The fact is, there is no military solution to Iraq's civil war.

A well-planned withdrawal is the one and only path to a political solution, the only way to spur the Iraqis to take responsibility for their own future and to spur other countries to do their part to help secure that future.

That's why I co-sponsored legislation with Senator Byrd to deauthorize the war; in other words, legislation to end President Bush's authority to wage the war. I started laying the groundwork for a swift and responsible withdrawal starting back last spring, by demanding that the Pentagon begin planning for it now.

And I've introduced legislation in Congress to ensure that members of Congress would be briefed on those withdrawal plans.

I'm also working to block President Bush's efforts to keep this war going after he leaves office. I've introduced legislation banning him from unilaterally negotiating a long-term security commitment to Iraq, including the possibility of permanent bases.

I'm honored that more than 30 of America's most esteemed former admirals and generals, including two former chairmen of the Joint Chiefs of Staff and five retired officers of the four-star rank, have endorsed me.

I believe that what matters in this campaign is not just the promises we've made to end the war. What matters is what we've done when it came time to match words with action.

In the end, the test is not the speeches a president delivers; it's whether the president delivers on the speeches. And I will deliver. I have not and will not waiver from my commitment to end the war.

My plans are not a best-case scenario or a promise I do not intend to keep. (INAUDIBLE) Senate has laid the (INAUDIBLE) will do as president.

As president...

LEMON: OK, apparently, we're having a little technical difficulty there with the microphone at this press conference. Do we have it back? Let's go back to this press conference.

CLINTON: ... with an intensive diplomatic initiative in Iraq, including a broader mission for the United Nations.

I know it won't be easy. But when I look at the road ahead, I think about our men and women in uniform and about their families. I have visited them here at home and overseas.

I've always been struck by the incredible diversity of our military: men and women of all backgrounds who love their country, are proud of their country and serve it together.

They represent the best of who we are, and they have done everything we asked of them.

Nearly 4,000 have made the ultimate sacrifice. Tens of thousands more have suffered wounds, both visible and invisible, to their bodies, their minds and their hearts.

I've had the honor of meeting many of these brave men and women serving in Iraq and Afghanistan and around the world. I've met them on the battlefield, I've met them at their bases, I've met them in their homes, I've met them in hospitals and rehabilitation centers.

They have made extraordinary sacrifices. And no matter how grave their injuries, they always say the same thing to me: "Promise that you'll take care of my buddies. They're still over there. Promise you'll keep them safe."

And I have looked those men and women in the eye and I have made that promise. And I intend to honor that promise by ending this war.

Thank you very much, and we'd be glad to take your questions.

(APPLAUSE)

Well, thank you very much.

(LAUGHTER)

QUESTION: (OFF-MIKE)

CLINTON: Well, I think that's a really fair question. And I suppose the answer depends upon, number one, how you see the situation post-surge, and you believe is motivating the Iraqis. Let me take each of those.

The surge's rationale was to give the Iraqi government the space and time to make the decisions that it had to make on allocating oil, on holding provincial elections, on looking at their process of de- Baathification and so much else.

And as late as last week, General Petraeus said that we haven't seen much progress toward national reconciliation. The little that we have seen, the halting steps taken by the parliament, have been very meager and not yet resulted in any significant changes.

Therefore, I would argue that the additional American troops certainly did help to quell the violence. And we're happy about that. I mean, any time violence is reduced, we should be very grateful.

And I have no doubt that American troops can contain, on a tactical level, violence wherever they are placed.

But the rationale of the surge has not been fulfilled.

And I think that some of the reason you're seeing any movement at all right now by the Iraqis -- albeit, in my view, far too little and too late -- is because we are in the middle of an election season, and a very vigorous part of this election is determining what the future of our Iraq policy will be.

And I have always thought, after having been there and talked with a lot of the leaders, that they will not step up and do what they must do unless they are convinced that we are in the process of withdrawal.

As of this summer we will have as many troops in Iraq as we had before the surge, and I don't think that's a sustainable policy for our country.

I also believe that there is no military solution. The argument that we could somehow keep a lid on violence while rushing around losing more and more of our sons and daughters, seeing more and more of them injured, spending tens of billions of dollars, is somehow progress I just reject.

And therefore, I think a different approach is called for, and I believe the approach I've outlined is in America's interest, in the Iraqis' interest, and in the region's interest. And I think I can make that case.

QUESTION: (OFF-MIKE) do you think he's done enough to denounce the comments from Reverend Wright?

CLINTON: Well, I think that question should be directed at him.

QUESTION: You've had a day now to, sort of, see the results of the Fed's action over the weekend. Are you still satisfied with how they acted -- reacted to the crisis on Wall Street?

And second, what about the regulators -- I'm thinking now the SEC and other agencies -- do you have any concerns about their (inaudible)?

CLINTON: Oh, I would not use the word "satisfied."

I think that the Fed acted on Sunday in a crisis mode that was necessitated by a string of actions that endangered the credit markets and the viability of a lot of our financial institutions. So as I said yesterday, I think that the Fed and the Treasury had to step in, in their view, to try to stop that one company from totally failing and send a message, try to rebuild some confidence in the markets.

But the roots of what happened on Sunday go way back, and there has been a total failure of regulatory oversight and supervision. You know, if you look at how we got into the situation we find ourselves in, there's many reasons, but among them, are the creation of all of these complicated financial instruments...

LEMON: Hillary Clinton in Philadelphia giving a press conference there with Michael Nutter, the mayor of Philadelphia by her side. Only commenting once on Barack Obama's speech on race, she didn't get a chance to see it nor hear it, but she was glad that he did broach the subject and said we have a complicated history here in America as it refers to race. But mostly her comments centering around the Iraq War and the economy.

Next hour of the CNN NEWSROOM starts right now.

Sighs of relief and signs of a rally on Wall Street. Two big reasons why.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxantshop.com