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CNN NEWSROOM

Detroit's Mayor in Court Today; Voting With Your Wallet; Iraqi Woman Puts Five Years of War on Canvas

Aired March 25, 2008 - 10:00   ET

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


(BEGIN VIDEO CLIP)
RICHARD FOGARTY, JACKSON CO., OREGON SHERIFF'S OFFICE: If they don't make enough to return the property, we can make them part of the theft case.

If baffles me why people would see something on Craigslist in this, by the face value, that it was legitimate and then refused to obey the man and his property owner.

(END VIDEO CLIP)

TONY HARRIS, CNN ANCHOR: Come on, people.

Police say several items have been returned but a number of others can't be found -- oh wait a minute. Someone did return a horse.

HEIDI COLLINS, CNN ANCHOR: Well, that was nice.

Good morning, everybody. I'm Heidi Collins.

HARRIS: And I'm Tony Harris.

Staying for, all the day, the CNN NEWSROOM. Here's what's on the rundown.

"Issue #1" for you, the voter, the people, economy. Two of the presidential candidates talk about their fix today. We talked to (INAUDIBLE).

COLLINS: Detroit's mayor in court today charged with eight felonies he snared in a sex scandal.

HARRIS: An Iraqi woman puts five years of war on canvas, pain and grief on display today, Tuesday, March 25th. You are in the CNN NEWSROOM.

COLLINS: Voting with your wallet. The troubled economy is "Issue #1" for you, and John McCain and Hillary Clinton are talking about it on the campaign trail today.

This hour we're keeping a close eye on Wall Street. As you might imagine, just a half hour into the trading day, investors look to build on Monday's big gains. Right now, as you see, the Dow is down about 65 points or so. One big factor could be the report on Consumer Confidence. How confident are you about the state of the economy? That report due out any moment. The stakes, as you know, are huge.

The all important gauge helps predict future spending, of course, a key element in healing the economy.

Now presidential politics and economic fixes. What are the specifics of Hillary Clinton's proposal?

Well, CNN's Dan Lothian has the story for us now. He's on the campaign trail and joining us from Philadelphia this morning.

So Dan, people want to know more about each one of the candidate's solutions. Let's talk about Hillary Clinton's plan.

DAN LOTHIAN, CNN CORRESPONDENT: Well, you know, this plan that she laid out yesterday, this four-point plan, and in part what she wants is for the government to really play a proactive role in helping people restructure their upside-down mortgages. In other words, they owe more on that mortgage than the house is really worth.

She also is calling for this creation of an emergency working group, a committee of high-level financial experts, economists, such as Alan Greenspan who can spend three weeks sitting down and trying to come up with workable new solutions. And then again, reiterating the call for $30 billion in stimulus to be pumped into some of these communities that are hardest hit. Essentially what she is saying is that, you know, this is issue number one, that all voters across America really care about the economy.

(BEGIN VIDEO CLIP)

CLINTON: Our housing crisis is at heart, an American dream crisis. Your home isn't just your greatest asset, your greatest source of wealth. It's your greatest source of security.

(END VIDEO CLIP)

LOTHIAN: Now the Obama campaign, after hearing some of her options and solutions that she pointed out yesterday, said, listen, there are good things in this plan that she has rolled out but they also said that there's nothing really new here. Take a listen to what the Obama's campaign manager said in a conference call yesterday.

(BEGIN VIDEO CLIP)

PLOUFFE: Most of them are repackaged ideas. We've talked about many of the same solutions.

(END VIDEO CLIP)

LOTHIAN: And they also went on to criticize the Clinton campaign, saying that, you know, she's talking about fixing the economy and some of the same people who have contributed to her campaign, some of the lobbyists who gave tens of thousands of dollars, these are some of the same people who are involved in the subprime mortgage mess.

So, you know, a lot of back and forth, as you know, that's been going on...

COLLINS: Sure.

LOTHIAN: ...lately in this campaign. And it continues, even about the economy.

COLLINS: Oh absolutely. I'm sure of that. We're going to be watching all of the candidates very closely to hear more about their potential solution.

Dan Lothian in Philadelphia this morning.

Thanks so much, Dan.

The economy, you hear the talk but what's the action you can take? An expert shares her advice just minutes from now right here in the CNN NEWSROOM.

HARRIS: Economy, "Issue #1" for the presidential candidates. We'll look at John McCain unveils his recovery at 1:00 Eastern and we will have coverage of that event for you, as well as Hillary Clinton's town hall meeting. That's due to get under way at 1:30 Eastern. Keep watching CNN.

Our money team has you covered, whether it's jobs, debt, housing or savings, join us for a special report. It called "Issue #1: The Economy," all this week at noon Eastern only on CNN.

In Detroit, fallout from the mayor's text message sex scandal. This morning the city's two major newspapers calling for Kwame Kilpatrick to quit. It comes just hours before his arraignment.

Live now to our Susan Roesgen.

Susan, do you still have the front page of those newspapers? I want the folks at home to see those.

SUSAN ROESGEN, CNN CORRESPONDENT: You bet. I still got them. I've been pouring through them. Practically both of these morning papers were completely devoted to this story today, the story that's got everything that sells papers, Tony, sex, betrayal, money, betrayal of the public trust really. "Mayor Charged," banner headline on one. And this one is the one that has -- these actually two mug shots, the mayor's mug shot and his former chief of staff's mug shot.

Now, it's pretty juicy story here. It's also a terribly sad and disappointing story for the people of this city who elected this mayor. At 1:00 this afternoon, Tony, in that courthouse right there he is going to go in today. He's going to face the formal criminal counts against him. He's going to find out from a judge how much time in prison each of those counts carries. It will be more than 20 years if he's convicted on all the counts. And the judge will actually set his bond.

He's accused of forcing a couple of police officers to be fired because they had uncovered the fact that he was having an affair with his chief of staff. Those police officers sued the city and the city was forced to pay more than $8 million. So the news was out. Now the city council is calling for the mayor's resignation. These papers say that he has lost all credibility. But the mayor himself says he will fight the charges.

(BEGIN VIDEO CLIP)

MAYOR KWAME KILPATRICK, DETROIT: I approach this process with the faith that I have in the system, what I've been taught about this country, and this legal process and the constitutional rights of all Americans since I was born. I believe in it and I believe that there will be a full airing of all the facts in this case that will result in my full and complete vindication of all that has been laid before you.

(END VIDEO CLIP)

ROESGEN: And Tony, part of the reason that people here are so disappointed is because this mayor brought a lot of promise, 37 years old, one of the youngest mayors ever in such a large city, a native of Detroit. He brought a lot of business initially to this city. And he had had some ethical allegations in his first term, had used a lot of money for some personal things, but he a had sworn when he was inaugurated for his second term he was going to clean up his act and get things going here. And now this -- Tony.

HARRIS: Yes. You know I think about, as I look behind you, that courtroom, what a sad moment it's going to be when he steps into that courtroom. I think about the personal tragedy for his family. As I recall, his mom is a U.S. representative and how difficult it must be.

ROESGEN: She is.

HARRIS: Yes. How difficult it must be for his family and for the citizen of that great city of Detroit.

Susan Roesgen for us.

Susan, thanks.

ROESGEN: Yes, Tony, I'm going to...

HARRIS: No, go ahead.

ROESGEN: Tony, I'm going to check -- and I'm going to check, too, in the next hour and see what kind of security measures they have in there because it will be a pretty big deal. Already all the satellite trucks are lining up here. Every major station here in Detroit is covering this.

HARRIS: Yes.

ROESGEN: A really sad story.

HARRIS: Yes.

ROESGEN: His mother, the congresswoman, has not commented as far as we know publicly on this case.

HARRIS: Susan Roesgen for us in Detroit.

Susan, great to see you. Thanks.

COLLINS: Quickly want to get this new information out to you because we've been telling you that we are expecting the Consumer Confidence index to be released today. Talking about how confident you feel in spending your money in this economy. And here are the numbers. Apparently they are at a five-year low now.

Here are the exact numbers: 64.5 now for mark the Consumer Confidence index is what we're talking about. In February it was 76.4. So you can see the difference in the numbers. The other number that had been out, what Wall Street expected, they were saying about 73.0. That was the expected Consumer Confidence index. But, in fact, it came back at 64.5, as I'm sure you know this index has been weakening since July. And the reason why we watch it is seems to result in lower spending, lower consumer buying. And therefore, obviously that can be a drag on the economy.

So once again, the Consumer Confidence index at a five-year low now. 64.5 this month, down from 76.4 in February. We are going to have an expert coming up to talk a little bit more about the economy and, in particular, this new report that came out which really tells us a lot about how people will be spending their money. Obviously that big "R" word, recession, is looming.

So we'll talk more about it coming up here in the CNN NEWSROOM.

HARRIS: What do you say we get another check of weather now? Rob Marciano standing by in the severe weather center. You know, at this time last week we were talking about the Merrimack River in Missouri and wondering, boy, how high that river would rise at crest.

ROB MARCIANO, CNN METEOROLOGIST: Right.

COLLINS: Yes.

HARRIS: And now we're talking about the White River in Arkansas.

(WEATHER REPORT)

COLLINS: Yes. I'm ready for daffodils and things like that.

MARCIANO: That Eastery sprinkle.

COLLINS: Yes.

MARCIANO: We already had Easter and now talking about snow.

COLLINS: I know. It's tough, isn't it?

MARCIANO: (INAUDIBLE) frustrating.

COLLINS: We're glad you're there, keep us (INAUDIBLE) and all of that.

Thank you, Rob.

MARCIANO: See you.

COLLINS: So who is watching your flight? And extensive CNN investigation into the Federal Air Marshal Service finds startling numbers. Less than 1 percent of daily flights have air marshals on board. That's fewer than 280 out of 28,000 flights every day.

CNN special investigative unit correspondent Drew Griffin also found flights out of Washington and New York has seen a big drop in air marshal coverage since the middle of 2003. Drew's going to have much more of his exclusive report tonight on "ANDERSON COOPER 360." That's 10:00 Eastern.

HARRIS: Jack Kevorkian, assisted suicide advocate and congressman?

(BEGIN VIDEO CLIP)

DR. JACK KEVORKIAN, MICHIGAN CONGRESSIONAL CANDIDATE: If I get into the House, it's not going to be a docile place.

(END VIDEO CLIP)

HARRIS: OK. Is there a doctor in the house? Maybe.

(COMMERCIAL BREAK)

COLLINS: You are in the CNN NEWSROOM. I'm Heidi Collins.

She finds inspiration in images of war. An Iraqi painter reflect on the horrors of her homeland.

(COMMERCIAL BREAK)

ANNOUNCER: "Stock Market Update" brought to you by...

HARRIS: OK. Let's get you to the New York Stock Exchange now for a look at the big board. Oh, close to an hour, 45 minutes or so into the trading day. The Dow down, where are we, at 67 points right now.

Boy, Heidi just shared with you the latest information on Consumer Confidence. Consumer Confidence had a five-year low, that according to the business-backed conference board. Likely to have some impact, maybe beyond what we're seeing so far on the markets. We, of course, will be checking the markets with Susan Lisovicz throughout the morning, throughout the day right here on CNN NEWSROOM.

COLLINS: Your wallet grows thinner. Your concerns, deeper. Where is the economy headed and how can you protect yourself?

Dayana Yochim, navigates the confusing waters -- boy, that's for sure -- of finance for the Motley Fool. She's joining us this morning to talk about it.

Hey, I guess we should begin with this Consumer Confidence numbers. I'm sure you heard them, but let's go ahead and them on the screen for people, if we could, Diana. Just a few moments ago we learned that the Consumer Confidence index, 64.5 for the month of March. Down from 76.4 in February. This is a five-year low. What are people to think?

DAYANA YOCHIM, THE MOTLEY FOOL: That's right. Well, what people are to think there, you have to remember what the Consumer Confidence index is in the first place. It is a survey of 5,000 people who are telling you how they feel about general business, employment numbers, and their own income right now, and over the next six months.

COLLINS: OK. Is that a lot of people? Is that a pretty good sample size, you think?

YOCHIM: You know what? It's an interesting sample size. If I'm a manufacturer, sure. It's probably reasonable. And I'm going to make decisions, if I'm a manufacturer, retailer, a bank or the Fed, I'm going to decide how many more plasma TVs to manufacture.

COLLINS: OK.

YOCHIM: Or whether I should cut interest rates or whether I should mail some free money to consumers to get them to go to the mall. If I'm a consumer I'm looking at this and thinking during a conversational lull I'll bring up these numbers at a party. Not much more than that.

COLLINS: OK. So they can tell I'm smart. OK. So that's an important point, though, because as a consumer they don't mean that much, is what you're saying.

YOCHIM: That's right. You have to remember, personal finances are just that, they are very personal. And at the Motley Fool we say you need to really do a little bit of soul searching first and ask yourself in times like this and really any time, a few important questions. And the first is, what would you do if the worst case scenario, you know, the thing that keeps you up at night happens to you?

COLLINS: Yes.

YOCHIM: And then after that, you decide, well, what can I do to either prevent that from happening or to prepare? Make it a little less daunting?

COLLINS: Sure. Yes.

YOCHIM: And what you have there is your to-do list. So if you're worried about job loss, start networking a little bit more. Clean up your resume. If you're worried about home value dropping even more, you might want to -- you might want to look around and say, hey, I think we're going to stay put at this place. Maybe we should refinance because we are going to stay here until the market comes back.

But that's what it is. It is personal. You have a lot of say in how all of this big picture news plays out for you.

COLLINS: Yes. And obviously, it's just plain different for everybody. Your dreaded event is going to be worse than my dreaded event.

YOCHIM: Exactly.

COLLINS: I bet mine will be worse. I'm kidding.

Hey, let's talk about something that was positive, though. Yesterday we had these housing numbers that came out. I want to put those on the screen, too, for people to take a look at. These are existing home sales. February 5, 0.03 million, January, 4.89 million. So that's up about 3 percent or so.

But you actually say once again, the only thing that matters is what's going on in your local neighborhood. Are we talking about cost here?

YOCHIM: That's right. Well, it is, you know, with real estate it really is about that old song, location, location, location. So what is happening in your locale and what are your plans? And that way you can use common sense as your guide to making real estate decisions and not, you know, let the pundits play with these numbers. Let the pundits have their day in their blaring headlines because for you, it really comes down to what are you plans? If you're going -- yes, this matters if you're moving any time soon. But you have to look around and see what is happening in your market, and adjust your plans based on that.

COLLINS: OK. Yes, that sounds like a good idea. Hey, I want to show one more positive thing while we're talking about the economy. We had this poll, the CNN poll that says 60 percent of Americans actually believe that the economy will be better next year.

You think that's a safe bet?

YOCHIM: You know, again, if you think that, great. I do. I do. For my personal economy, it is improving every day. So look at those numbers and, again, put them into the context of how they relate to your own finances.

COLLINS: All right. Well, we certainly appreciate your advice today. Remember, it is all relative to you and your own wallet. Great point. We appreciate the time, Dayana Yochim...

YOCHIM: My pleasure.

COLLINS: ...from Motley Fool. Thanks again, Dayana.

YOCHIM: Thank you.

COLLINS: Keep watching CNN, too, because our money team has you covered, whether it's jobs, debt, housing or savings, you can join us for another special report called "Issue #1: The Economy." All this week at noon Eastern, only on CNN.

HARRIS: The Virginia Tech settlement, money for the families of those killed in the school rampage last year.

(COMMERCIAL BREAK)

HARRIS: From the state of Virginia is reportedly offering the families of those killed in the Virginia Tech massacre $100,000 each, but the Associated Press reports there's a catch. The families who agree cannot sue the state or the school. State officials are also offering to pay the medical and counseling bills of the families and surviving victims. The families have until Monday to decide whether to accept.

COLLINS: They were dubbed the Barbie Bandits. Two young women nabbed in a bank heist outside of Atlanta. Today, Michael Chastang, the mastermind of that caught-on-tape caper, will be sentenced. Ashley Miller has been sentenced to a two-year prison stint and eight years probation. Co-defendant Heather Lyn Johnston was sentenced to 10 years probation.

Both young women admitted plotting with the teller to rob the bank where he worked. The teller, Benny Allan, was sentenced to 10 years. The heist netted about $11,000.

HARRIS: Out of prison and in the running, Dr. Jack Kevorkian, who served time for physician-assisted suicide, wants to be a congressman.

CNN's Susan Roesgen spoke with him.

(BEGIN VIDEOTAPE)

KEVORKIAN: I say the truth as I see it and as others see it.

ROESGEN (voice over): After eight years in prison Jack Kevorkian still believes in the right to help people kill themselves. But he'll have to fight for that right as a politician, not a physician.

In the 1990s Kevorkian claims to have been the physician assisting more than 100 suicides of terminally ill patients. It opened a national debate on euthanasia but Kevorkian was sent to prison for second-degree murder, and today only the state of Oregon allows physician-assisted suicides.

By running for Congress, Kevorkian says he wants to somehow force the U.S. Supreme Court to give Americans more rights of every kind.

KEVORKIAN: But that's the only way to do it. And that's why I'm running. One of the big reasons I'm running, because if I get into the House, it's not going to be a docile place.

ROESGEN: Kevorkian is 79 years old but he is as passionate in his beliefs as a teenager and some would say as politically naive. He says he plans no campaign advertising, he's not asking for campaign donations, and he doesn't have a campaign platform of issues. What he does have is name recognition.

(On camera): What do you think of the nickname Dr. Death?

KEVORKIAN: It never bothered me.

ROESGEN: Never? OK.

(Voice over): The two other candidates in this congressional race have another name for Kevorkian, a spoiler. They worry he'll take votes away from them to promote his own agenda.

(On camera): Kevorkian needs 3,000 signatures by July in order to get on the ballot here in Detroit. But he says if he does become a congressman he won't stay more than two years because he doesn't want to become a career politician.

Susan Roesgen, CNN, Detroit.

(END VIDEOTAPE)

COLLINS: John McCain takes on the Democrats. Will pass flirtations with the opposition give him a November advantage?

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Tony Harris and Heidi Collins.

HARRIS: Bottom of the hour. Welcome back, everyone, to the CNN NEWSROOM. I'm Tony Harris.

COLLINS: Hi there, everybody. I'm Heidi Collins.

John McCain and Democrats. Talk of close ties years ago. Still has some Republicans up in arms. How it will play, though, in November?

CNN's Joe Johns reports.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT: McCain right for the right. On the campaign trail McCain wears his conservative colors on his sleeve, but some Republicans question his loyalty.

LARRY SABATO, UNIV. OF VIRGINIA: It's remarkable that somebody with that kind of track record could become the party nominee for president.

JOHNS: These questions that the Republican presidential candidate may have more in common with Democrats than his own party have daunted him for years. The New York Times reports McCain approached Democrats about leaving the GOP to join their ranks in 2001. Democrats were testing the waters with several Republican senators and McCain was one of the senators they asked to jump ship so they could gain control of the Senate. The McCain campaign says that's what happened, but The Times says a McCain staffer may have been the first the to raise the issue.

Fast forward three years later when John Kerry was running for president, and once again, McCain was mixing it up with the other side. Listen to what he told ABC News.

CHARLES GIBSON, ABC NEWS: If he came across the aisle and asked you, would you even entertain the idea, or will you rule it out for good and all and ever right now?

SEN. JOHN MCCAIN, PRESIDENTIAL CANDIDATE: John Kerry is a very close friend of mine. We've been friend for years. Obviously, I would entertain it.

JOHNS: But, who came up with the idea? Once again, depends on who you ask.

VOICE OF SEN. JOHN KERRY (D), FMR. PRESIDENTIAL CANDIDATE: His people similarly approached me to engage in a discussion about his -- for potentially being on the ticket.

JOHNS: McCain quickly responded then calling it a fantasy. More recently, he tried to set the record straight.

MCCAIN: I am a Conservative Republican, so when I was approached when we had that conversation back in 2004, I mean, that's why I never even considered such a thing.

JOHNS: Even if he didn't suggest it, McCain's dalliance with Democrats could leave conservatives uneasy. And get this, that might be a good thing for him.

UNIDENTIFIED MALE: When conservatives are complaining at McCain, McCain appeals more strongly to the swing independents who will actually determine the election in November.

JOHNS: Joe Johns, CNN, New York.

(END VIDEOTAPE)

COLLINS: CNNpolitics.com is your source for everything political, from the candidates' movements to the latest delegate count. Get all that and more at CNNpolitics.com.

HARRIS: A month long cease-fire in Iraq, threatening to unravel today. Iraqi security forces fighting members of Mahdi Army militia -- it's happening in the southern city of Basra and in several Baghdad neighborhoods. At least 12 people have died and 32 others have been wounded in Basra.

The Mahdi Army under the leadership of cleric Muqtada al-Sadr is calling for a nationwide civil disobedience campaign. The group angry over raids and detentions of its members. The U.S. says last summer's suspension of the Mahdi Army military activity has helped curve bloodshed. Coalition forces continue to target those who have ignored the cease-fire.

While fighting rips her country apart, an Iraqi artist is using war as inspiration. Our Kyra Phillips is in Baghdad with that story. Kyra, great to see you. I can't wait to hear this story and to see some of the work.

KYRA PHILLIPS, CNN CORRESPONDENT: It's beautiful, believe me. You know what Tony, when I met Azara she was very shy and soft-spoken, and then I saw her paintings and realized that's where her voice cries out.

(BEGIN VIDEOTAPE)

PHILLIPS: Her paintings need no explanation. If you understand the meaning of war, you will feel every stroke of Azara Basa's (ph) her brush. Tell me about this piece.

"Iraq has become a huge prison for all of us, old and young. They all suffer."

PHILLIPS: Any of your family, any of your loved ones, have they been put in jail?

"My brother is in prison right now."

PHILLIPS: Why is your brother in jail?

"I don't know why he's in jail. He was walking in the street when he was picked up."

PHILLIPS: When you look at this piece do you think about your brother do, you think about your nephews?

"Of course, I do. This is what I feel. My pain and suffering is expressed right here in this piece."

PHILLIPS: Every painting has a personal story. Azara's reality is her portrait. The emotion in this one is very powerful.

"These Iraqi women are of different ages, but have the same pain and grief. Thieve all lost a husband, a father, a son. And behind them, the cemetery and the sky is red, the color of blood, blood from all the innocent people killed in the explosions for no reason."

PHILLIPS: Are these your friends? Is this your family? Is this you?

"Yes, this is me. My brother was killed and we don't know why."

PHILLIPS: But Azara says it is the new generation that is suffering the most.

"The baby's bottle is full of blood instead of milk, and these are the feet of the occupation that's walking on our land and taking our innocence away."

PHILLIPS: Now, when I looked at the spider I thought nightmares. What does that mean to you?

"Occupation, as you can see its legs are all over our lives. The cage imprisons our dove which represents peace and the rose, when it's picked, it starts to die. This is the generation that has nothing right now."

PHILLIPS: Azara started painting as a little girl, no formal training, just a natural gift. Now at 31, she is the first female painter in battle-torn Fallujah to ever be showcased in an art gallery. Are these paintings your voice?

"They are a part of my soul."

PHILLIPS: It's amazing to me that even within all of this darkness, Azara, like so many Iraqis, find light.

"This represents the origin of Iraq, its roots. But the occupation cut the roots. But a new tree grows and that represents the new Iraq."

PHILLIPS: Do you remember the moment that you were inspired to paint this, did something good happen to you that day?

"I was thinking of our people and how I want them to be united. I used the color green because, to me, green means hope and the strength of the arms is holding the strength, and that tree is the united Iraq I want to see."

PHILLIPS: And until Azara sees it, she will paint it.

(END VIDEOTAPE)

PHILLIPS: And Tony, Azara was born and raised in Fallujah. She's never left the area. She's been to Mosul that is it. So one of the first people that came to see her paintings in that gallery, it was her grade schoolteacher and her teacher at that point said, I still have one of your very first paintings from when you were in elementary school hanging up at the school still.

HARRIS: Just curious, is she able -- I hate to put this in financial terms but it's wonderful work obviously. I'm wondering if there is a market for her paintings, can she make a bit of a living from her work and her art?

PHILLIPS: It's tough. It's tough. I mean, yes, there is a community there that appreciates art and they are purchasing her paintings. But it's not like the states where people buy and sell continuously and go to the museums. That's one of her dreams, Tony. She wants to come to New York. She wants to study. She wants to push her life forward.

She didn't have the chance to do that under Saddam Hussein. Now she really hopes to do it. So, I'm hoping somebody will see this piece and maybe want to sponsor her, bring her over for a fellowship. Maybe you and I can work on that together.

HARRIS: I think we can work on that project. Kyra Phillips in Baghdad. Kyra, appreciate it. Thanks.

PHILLIPS: Thanks.

COLLINS: Quickly want to get you to the Pentagon now, and our Barbara Starr who is working on a story regarding, Barbara, the Air Force and an accidental shipment of some kind to Taiwan. Talk to us a little bit more about what you know at this point.

BARBARA STARR, CNN CORRESPONDENT: Heidi, at this hour a briefing is going on here at the Pentagon. Top officials briefing the news media on what they call a regrettable mistake. What has happened, they tell us, is that four electrical fuses for intercontinental ballistic missiles, the fuses are not nuclear in of themselves.

This is Ryan Henry, a top DOD official, the Secretary of the Air Force, four electrical fuses were shipped to Taiwan by mistake. These are trigger, nose cone fuses assemblies, if you will, for intercontinental ballistic missiles, nuclear missiles that Taiwan, of course, does not have.

These went to Taiwan by mistake. Taiwan has made a request for the sell of batteries for helicopters. And somehow the U.S. military, the Defense Department, accidentally shipped them these fuses, four fuses for intercontinental ballistic missiles.

Now, this has great significance in terms of U.S. relations, of course, with China and Taiwan because the Chinese are very sensitive to this. The Pentagon has at this briefing just confirmed that they have notified the Chinese of this mistake. They, of course, have been to Taiwan now. They have picked up these four assemblies and have brought them back to the U.S.

They are assuring the Chinese there is no change in U.S. military and security policy towards China. But the fact is this could not be more embarrassing for the United States. President Bush has been directly notified of this incident. Secretary of Defense, Robert Gates, has ordered a full investigation and inventory of all components related to nuclear missiles like this.

You know, it was just in August that the Air Force had to confess it accidentally flew some nuclear warheads across the country not knowing they were on board a B-52. So, even though these assemblies in themselves are not nuclear, the fact that these components were accidentally shipped to Taiwan when Taiwan thought they were getting helicopter batteries is a matter of embarrassment if not as well some significance. Heidi?

COLLINS: Of course, I would just want to make clear for the people watching this that those triggers are now back in possession by the United States as you said, yes?

STARR: Absolutely, Heidi. The phrase the U.S. military uses is "positive control." They have been to Taiwan. They have picked up these fuses, these electrical triggers, again, emphasizing for people the triggers in themselves are not nuclear. But they are the nose cone, the front-end triggering device, the fuse device for intercontinental ballistic missiles, which are nuclear weapons, which Taiwan, of course, does not possess. These are the types of fuses that were used on U.S. ICBMs, U.S. intercontinental ballistic missiles. It seems absolutely extraordinary. Taiwan thought they were buying helicopter batteries. Apparently they opened the boxes and found these ICBM fuses and called the United States and said, please come get them.

COLLINS: All right. Well, understood. Thanks so much. CNN's Barbara Starr at the Pentagon this morning. Thanks, Barbara.

HARRIS: The campaign trail, today it's money trail. McCain and Clinton hit the economy. Obama hits the beach.

(COMMERCIAL BREAK)

Displaying his sex-offender status: A Kansas man must own up to his crime at home and on the road. The story coming up in the CNN NEWSROOM.

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COLLINS: No time to travel? The weak dollar may make you think twice about a European vacation. But don't change your plans yet. The story coming up right after we talk about Wall Street.

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HARRIS: When in Rome, do as the smart American travelers do.

CNN's Alessio Vinci has a tip to stretch that shrunken dollar.

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ALESSIO VINCI, CNN CORRESPONDENT (voice-over): Nothing will spoil Judy and Jennifer's Roman holiday, but the thought of a weak dollar is difficult to digest. So instead of a sit-down lunch, a quick, cheap sandwich will do for today.

JUDY MAZER, TOURIST FROM CHICAGO: Save a little bit of money so that maybe we can spend a little bit extra on dinner.

VINCI: From food to fashion, American tourists are thinking twice about every dollar and euro they spend. That leather bag you always wanted to buy in Italy, not this trip. Certain souvenirs will just have to wait.

JENNIFER SUTHERLAND, TOURIST FROM CHICAGO: I made the decision that I wasn't going to change my plans radically, but I am very conscious of additional purchases.

VINCI: This may not be the right time to spend, when even a can of soda can cost you more than twice the price back home.

UNIDENTIFIED FEMALE: It's terrible.

UNIDENTIFIED FEMALE: The American dollar is terrible here.

UNIDENTIFIED FEMALE: I mean, I would certainly buy a lot more if the value of the American dollar was better, definitely buy more.

VINCI: An estimated 4 1/2 million American tourists visit Italy each year. Tourism officials say so far they have seen a 5 percent drop in that number. American tourists here in Italy spend an estimated $10 billion each year.

EUGENIO MAGNANI, ITALIAN TOURISM BOARD: We want them to keep concentrating on Italy as a travel destination, so the Italian outliers (ph) are very, very sensitive to the Americans. They will keep an eye on them and they will keep the price very, very firm. No increase on the price.

VINCI: One suggestion to save money, book your vacation with a tour operator in the U.S. and pay for it in dollars before leaving. And, if Rome is on your itinerary, here is another suggestion.

(on camera): Traditionally, if you want to return to Rome, you must throw a coin in to the Trevi Fountain, but with the current economic crisis, you want to be careful about how much you toss. For example, this two euro coin is the equivalent of more than $3 U.S., so if you do want to come back, keep a quarter handy and start saving now.

Alessio Vinci, CNN, Rome.

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HARRIS: Ha, we're loving everything in the "ISSUE #1" here, even foreign travel. Our money team has you covered whether it's jobs, debt, housing or savings. Join us for a special report, it's called "ISSUE #1," the economy, all this week and noon Eastern on CNN.

COLLINS: One of 4,000 U.S. servicemen and women to die in Iraq, but much more than just a number.

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UNIDENTIFIED FEMALE: Fun-loving, happy, he loved his friends. You never saw Andy without a smile. And every time you see him, he always had a hug.

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COLLINS: Andy, to his friends, the story coming up in the CNN NEWSROOM.

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COLLINS: He was one of four soldiers killed Sunday in Iraq, making the U.S. death toll there 4,000. But to his friends back home in Missouri, Andy Habsieger was more than a number. Ann Rubin of affiliate KSDK reports.

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UNIDENTIFIED FEMALE: Well, it was also hard for me just reading -- when you read his MySpace ...

ANN RUBIN, KDSK REPORTER (voice-over): The group that gathered in Festus was missing one. Andy Habsieger should have been there. In his circle of friends, he was the heart and the soul.

AMY EDWARDS, FRIEND: Fun-loving, happy, he loved his friends. You never saw Andy without a smile. And every time you see him, he always had a hug.

JILL LAIBEN, FRIEND: Andy was there for everybody. We all said that, you know, we need Andy here right now because he would be the one comforting everybody and would know just what to say, would tell everybody it was going to be OK.

RUBIN: But it wasn't. There had been an explosion near Baghdad, Andy Habsieger had been killed in the line of duty. His friends say Habsieger knew the dangers, but wanted nothing more than to serve his country. He joined the army, then deployed to Iraq in the fall.

LAIBEN: None of us wanted him to go, but we knew that's what he wanted to do. He didn't want to be here. He wanted to be over there serving.

RUBIN: Back at home, his community is honoring him. The local Dairy Queen posted a message on its billboard. His friends say it just shows how much he meant to everyone here.

ADAM PAIGE, FRIEND: To his friends, he was loyal. He was loyal to the end.

EDWARDS: He was just a great person. And, you know, we love him and we will miss him forever.

RUBIN: And they say most of all, they're proud of Andy Habsieger and of his service.

LAIBEN: More than I've ever been proud of anybody, and it's hard that it had to end this way, but I'm so proud of him.

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COLLINS: Andy Habsieger had been due to come home on leave in just two weeks.

HARRIS: Detroit's mayor in front of a judge. How text messages to this woman got him where he is today.

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COLLINS: He was sentenced to five years probation and house arrest. But a 72-year-old Kansas man must also take one more punishment with his sexual offender guilty plea. Leroy Shad (ph) must display signs that say "Sexual offender lives here" on each side of his house.

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