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Gas & Oil: New Records, New Concerns?; Indiana Flooding; Drilling for Solutions

Aired June 09, 2008 - 11:00   ET

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

TONY HARRIS, CNN ANCHOR: And good morning again, everyone. You're informed with CNN.
I'm Tony Harris.

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

Developments keep coming into the CNN NEWSROOM on this Monday, June 9th. Here's what's on the rundown.

Filling your gas tank or your refrigerator? The economy is issue #1 for you, and for us. This hour, laid-off autoworkers ratchet up new career training.

HARRIS: And what a romp in the upper Midwest. Heavy rains send rivers over their banks. Now more rain means some receding rivers could crest again -- in the NEWSROOM.

From gas to groceries, prices are climbing, your paycheck is shrinking. Your money is issue #1, and there are a number of new developments we're watching closely this morning.

Where is Wall Street headed today? Ninety minutes after the opening bell, the Dow seems to be rebounding from Friday's big losses, when it was down more than 3 percent.

Investors around the world are nervous. Overseas markets tumbled overnight. Japan, South Korea, Taiwan, Thailand and New Zealand all down.

Soaring energy costs are fueling much of the anxiety. For the first time ever, U.S. gas prices have inched above $4 a gallon. Gas and oil, let's get the latest on America's fuel crisis.

Ali Velshi, CNN's senior business correspondent.

Ali, you know, I tuned into "AMERICAN MORNING" and I heard the tail end of you talking about one analyst's prediction of a super spike. Is that what you said, a super spike in oil prices?

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Yes, it was an executive --- an executive at Goldman Sachs. Now, they had been talking about the super spike for a long time. Their current analysis is about 150 bucks this year for oil.

HARRIS: Yes.

VELSHI: But they're saying that it will come. It doesn't sound like a super spike, right, from $139 roughly to $150?

HARRIS: That's right.

VELSHI: One analyst, CIBC, who says $2.25 over the course of the next little while. There was an analyst on Friday who said $150 by July 4th. So, you know, we're kind of in that neighborhood.

The question is, that has an effect on gas prices. So we've got $4.02, which you can see right here as a national average today. We only see that increasing, because gas prices obviously have to increase when oil prices go up.

HARRIS: Sure.

VELSHI: So that's a bit of a problem. And that is having an effect on how Americans feel about the economy.

We've known this for some time, but new numbers that we've got, Tony, reinforce that fact. Take a look at this.

A CNN/Opinion Research poll shows that the economy is issue #1 for 42 percent of Americans polled. For 24 percent it's Iraq; 12 percent say health care; 11 percent say terrorism; and 8 percent say immigration.

Now, how does that sort of pan out? Well, 22 percent say the economy right now is good, compared to 25 percent who thought so in March. Forty percent in January, and 54 percent in September.

So we see the number of people who think the economy is good, deteriorating. There's a little bit of a silver lining.

We asked those same people where they see the economy a year from now. So 22 percent say it's good now, 78 percent say it's poor. A year from now? Fifty-two percent thought that the economy would be good a year from now, only 46 percent thought it was poor.

So that's the bright side. But again, if we keep pushing higher and higher in those gas prices, that takes money out of people's pockets...

HARRIS: That's right.

VELSHI: ... and it gives people the impression that things aren't as good. You've got gas prices, you've got your jobs, you've got interest rates, you've got all those things, home prices, taken together to give people a sense of where the economy is. So a little bit of silver lining.

HARRIS: Yes. You and your team have really been cranking on this for weeks. And boy, a couple of months now. And I know you're getting ready for "ISSUE #1" at noon.

VELSHI: Yes.

HARRIS: Ali, appreciate it. Thank you.

VELSHI: A pleasure.

HARRIS: And at noon, Ali is actually going to drill down a little deeper into the economy. He will interview Treasury Secretary Henry Paulson. Again, that is live during "ISSUE #1," noon Eastern.

COLLINS: Barack Obama back to the campaign today. Right now we are waiting for an appearance by the presumptive Democratic presidential nominee in North Carolina. The economy is the focus for that. We're going to take you there live when it gets under way.

Hillary Clinton had the weekend to -- the weekend spotlight, that is, to herself. She spoke to supporters in Washington, suspending her campaign and backing Obama.

John McCain has a couple of fund-raisers today. He's also making an appearance in Virginia right now. McCain raised $21.5 million last month. His best fund-raising month so far. Obama raised $32 million in April.

Boy, it looks like Senator Ted Kennedy is going home today. A statement from his office says he will head home to Hyannisport.

Just a week ago, you recall, Kennedy had surgery to remove a cancerous tumor in his brain. The statement says the senator will continue to recuperate at home after leaving Duke University Medical Center in North Carolina. He'll wait a while longer before starting the next phase of his treatment, though. Kennedy's doctor says that will include chemotherapy and radiation treatments.

HARRIS: Extreme weather to tell you about this morning, from massive flooding across the Midwest, to sizzling heat in the Northeast. Indiana, Iowa, Wisconsin, Michigan, all slammed by storms that dumped heavy rains.

People across the region dealing with flash flooding, power outages and evacuations, as you can imagine. At least eight deaths are blamed on the storm.

And people along the East Coast are trying to beat the heat. Some major cities could see triple-digit temperatures today.

We are all over the story for you. Our Reynolds Wolf is watching the mercury from the National Mall in D.C. And CNN's Susan Roesgen is in Columbus, Indiana, where people are trying to pick up the pieces this morning after record flooding.

Let's begin with Susan.

And Susan, you shared the story of Ann (ph) with us last hour, who has lost just about everything. And insurance is not going to help her, and so many of the people on that street where you are this morning. SUSAN ROESGEN, CNN CORRESPONDENT: Well, you know, Tony, I mean, what you're looking at really is people's lives laid out on their front lawn. I mean, we've got here great baseball facts and figures, soaked. This is a little plaster angel. Can you see the mud that's on top of it?

Everything, from 38 years of living in this house. We've got a mixer here, a mud-soaked mixer. Recipes, soaked. Shoes, pots and pans, clothes, quilts, you name it, it's out here.

It comes from a couple that live in this house, again, for 38 years. An 86-year-old man and his 79-year-old wife. And this is their daughter Jeannett.

And Jeannett, you are still finding things that mean a lot to you.

JEANNETT LANDCASTER, FLOODING VICTIM: Yes. Yes, I am. The baby rattle that my mom kept all this years of us kids, and found the hand print of when I was a baby. It's kind of emotional right now for me.

ROESGEN: Those are your parents right there, right? You found that picture.

LANDCASTER: Yes. They're right there.

ROESGEN: Are they going to be able to come back and live in this house?

LANDCASTER: No. I don't think they are, no, because we're finding out more things about the house since it's on a slab. Mold can get in. And I don't think they're going to be able to come back now, no.

ROESGEN: How are they taking it?

LANDCASTER: Not very well. My dad has not been here yet. He can't -- we're afraid he'll fall. But my mother is very emotional.

And -- well, this is their life. You know, they've been married 60 years next year, and everything's gone. I mean, you know, they're not young, so they have to start over again. And, you know, no insurance, flood insurance, nothing.

ROESGEN: That's what we're hearing a lot of, Jeannett.

LANDCASTER: Yes.

ROESGEN: It's your life out here, too, basically.

LANDCASTER: Oh, yes, definitely. This is my life. My brothers and sisters here were helping my mom and dad. And we've had all the grandkids and everything.

Yes, this -- didn't expect it to go through like this, no. And they've lost everything. ROESGEN: Are you going to be here when they see it?

LANDCASTER: I was here with my mom when -- I brought my mom Sunday for the first time and we walked through. And she is a piano player. She loves to play the piano. And we're hoping that we can salvage that.

That's the one thing she looked at and she says, "My music" and her accordion, because she plays a lot. And she does it for organizations, too.

ROESGEN: OK, Jeannett. I know you've got a lot of work to do out here. You have friends and neighbors who have come to help you.

LANDCASTER: Yes. Oh, yes, neighbors. You can't beat it. They're really friendly around here, yes. They come with sandwiches and water, so my heart goes out to everybody.

ROESGEN: Our heart goes out to you, Jeannett.

LANDCASTER: OK.

ROESGEN: Thank you for taking the time to talk to us.

LANDCASTER: Thank you.

ROESGEN: You know, Tony, that's really what we're finding here. And I have found that to be true so often when we cover disasters, especially weather-related disasters, people who have basically lost everything are trying to help each other recover.

HARRIS: Yes. We feel so bad for everyone impacted by the storms and all that flooding.

Susan Roesgen for us in Columbus, Indiana.

Susan, thank you.

COLLINS: We are also talking about that brutal heat along the East Coast. Reynolds Wolf is sweating it out right now on the National Mall in Washington, D.C.

We're just talking about some seriously dangerous temperatures here, Reynolds.

REYNOLDS WOLF, CNN METEOROLOGIST: Yes. Really and truly, this is the situation. These are dangerous temperatures. And it's not only the temperature we're dealing with, it's that tricky thing that we often refer to as the heat index, when you have those high temperatures and the incredible humidity, you pile them together, and you get something like this.

Check out this. You see on this nice little gauge, this is a heat index indicator. You'll notice it is above the century point. And that is going to be the situation not just for today, but for tomorrow as well. Take a look at this video on how people in the area are dealing with it. The city of Washington, D.C., has set up cooling centers, and also some spray areas where kids go out and enjoying the water. A smart thing to do. Anything they can do to cool down.

Also, we've got many other situations, many other things going on, like, say, a lot of cooling centers, as I mentioned. A lot of the attractions that you have in Washington, D.C., air conditioned. So people will be walking in and taking advantage of that. Certainly a smart thing to do on a day like today.

We were talking about some power situations here in Washington, D.C. We had some outages with, let's see, 1,200 homes now without power due to the power surges from the increasing demand for air conditioning.

Over in Baltimore, not too far from here, Tony's old romping ground, we've got some power advisories that are in effect there. People are urging consumers to please use as little power as possible to try to conserve. And at the same time, up in the City of Brotherly Love, up in Philadelphia, they're limiting the school day, sending kids home right at noontime for today and tomorrow as this intense heat grips this area.

It's up and down the Eastern Seaboard. We're talking about some nine different states, including the District.

Take a look behind me. You see still a lot of tour buses, a lot of people that are out making the most of it.

They really don't have much of a choice. You've got so many people here. This being a major tourist destination, they made plans to come to the nation's capital and see these incredible sights, and it just so happens they happen to have, I guess you could say, pretty bad timing to show up. Still a short ways away from summer, but the summertime heat is already here in full force, and they're doing their best to deal with it.

Now, as Jacqui's been talking about, we're going to see some changes in the forecast, certainly some welcome ones as this high pressure begins to break down later tomorrow and into Wednesday and Thursday. We're going to see some fronts come through, and those frontal boundaries will drop highs back into the 80s. And that is certainly something to sound the alarm about, no question.

All right. Let's send it back to you guys in the studio.

COLLINS: Yes. Hey, before we let you go, Reynolds, show us the temperature gauge one more time, if you can hear me. Show us the temperature gauge one more time, because last time it just kept screaming upwards the whole time you were holding it. Like 111 or something.

WOLF: Right now -- right now, it's about 103 or 103.2. It constantly changes a little bit as the wind continues to come in.

You guys have to forgive me if I'm not hearing you too well, because my ears are melting into the rest of my head.

COLLINS: That's hot. Really hot.

WOLF: Absolutely. That's the latest we've got for you. Let's send it back to you.

COLLINS: All right, Reynolds. Thank you.

(WEATHER REPORT)

HARRIS: Supply and demand, a part of the problem for gas prices. Would more drilling in the Arctic relieve the crunch?

(COMMERCIAL BREAK)

HARRIS: Growing oil uncertainty, rising gas prices. The president again pushing Congress to approve Arctic Wildlife Refuge oil drilling. But would that really help?

CNN Technology and Environment Correspondent Miles O'Brien is in New York for us this morning.

And Miles, let's sort of break this down, if we could here. ANWR, again, the Arctic National Wildlife Refuge, can you show us where it is, what we're talking about here?

MILES O'BRIEN, CNN TECHNOLOGY & ENVIRONMENT CORRESPONDENT: Yes. Yes, let's talk about what it is, where it is...

HARRIS: Great.

O'BRIEN: ... and whether it amounts to really a drop in the bucket.

You know, we really need a lot of oil. Let's keep that in mind as we go down to the ANWR refuge, the Arctic National Wildlife Refuge.

Zoom on in to Alaska. This is a big hunk of land here. We're talking about 1.9 million acres, about South Carolina's size.

And you see that little red section over in that part?

HARRIS: Yes.

O'BRIEN: That is the part in question. Up right around over there, just a little off the screen, is Prudhoe Bay. We know what that's all about. That's where the Alaska pipeline begins its track of oil down south and ultimately into our automobiles.

Now, this red area here is an area that is about 1.5 million acres. It's the area that is designated as a possible oil exploration site.

What's in that area? Well, this is pretty special part of the world, part of our country. Thirty-nine separate species of land mammals. We've got black, grizzly and polar bears. And we know the polar bear just made its way onto the threatened list.

I was wondering, who wins the battle between a polar and grizzly bear? I wonder if they ever get into it. That's a separate issue entirely, Tony.

HARRIS: Yes, certainly.

O'BRIEN: Yes, let's not go there.

HARRIS: OK.

O'BRIEN: Now, this is beautiful country, there's no question. I'm sure there's, you know, moderately invasive ways of going after the oil there. But let's take that aside for a moment and run through the numbers.

How much oil is there, you may ask. Good question. Well, here are the estimates. They're all over the map, if you will.

They go somewhere between 1.9 billion to possibly, possibly, as much as 16 billion. OK, now remember those numbers -- 16 billion on the high end, 1.9 billion, there's a 90 percent chance of that.

Now, let's factor in what we use.

HARRIS: OK.

O'BRIEN: Do you know what the number is? Do you happen to know?

HARRIS: No, I -- no, I don't. No, I don't.

O'BRIEN: U.S. oil usage on an annual basis -- this is a big number, we are oil thirsty -- 7 billion per year.

HARRIS: Per year.

O'BRIEN: Seven billion gallons per year. OK?

So now let's do a little bit of math on that, and how long would that last. Well, if it was on the low end, that 1.9 billion amount...

HARRIS: Yes?

O'BRIEN: ... four months. OK? On the high end, just a little over two years.

HARRIS: So you wonder if it's worth it.

O'BRIEN: This is the question you have to ask yourself.

HARRIS: Yes.

O'BRIEN: Is that showing up OK with that yellow?

HARRIS: Yes, that's pretty good. Yes.

O'BRIEN: All right. The question you have to ask yourself is, is it worth it?

Now, here's one other kicker for you.

HARRIS: OK.

O'BRIEN: If we started today, doing the work, beginning the drilling, by the time a single drop of that refined product would get into my honkin' (ph) Yukon XL, which I would like to get rid of by that time...

HARRIS: Yes. But you won't be able to.

O'BRIEN: It's useless to me now.

HARRIS: Absolutely.

O'BRIEN: It's a lawn ornament.

Ten years, Tony. Ten years.

HARRIS: Oh boy. Yes.

O'BRIEN: So we're talking about, you know, somewhere between three months and two years of supply that wouldn't even get to us for 10 years.

HARRIS: Yes.

O'BRIEN: Keep that all in mind as you hear the politicians start talking about ANWR. It really is not a solution.

HARRIS: And I wonder about the psychology of all of this. I wonder if the conversation about drilling in ANWR lessens the urgency to find and define renewables, and to conserve.

O'BRIEN: You absolutely have hit the nail on the head. To the extent that we focus on these solutions, which as we can see from the numbers are illusory at best, we delay the hard decisions we must all make collectively about conservation, number one, as a start...

HARRIS: Yes.

O'BRIEN: ... and number two, moving on to something else to power our economy. And the longer we delay, the harder it's going to be.

HARRIS: Yes. Good stuff, Miles. Good to see you.

O'BRIEN: All right.

HARRIS: Thanks.

Do you have a question about where the economy is heading, or questions about your credit, gas prices, food prices, anything else? E-mail them to us now. E-mail them to issue1@cnn.com.

COLLINS: The economy and your health. Are money concerns taking a toll on your well-being?

CNN Medical Correspondent Elizabeth Cohen takes a look.

(COMMERCIAL BREAK)

HARRIS: This just in -- new leadership for the Air Force.

Barbara Starr is at the Pentagon for us this morning.

Good morning, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, good morning, Tony.

The other shoe now having dropped after last week, when Defense Secretary Robert Gates fired both the military and civilian head of the Air Force over some mistakes with nuclear weapons. Now he has named -- he and the White House naming their replacements.

To become the new chief of staff of the Air Force, the new top four-star commander, General Norton Schwartz. This is a man who planned to retire, but now the president naming him to become the new head of the Air Force, and if confirmed by the Senate, which is expected, he will stay on and lead the uniform part of the service. Also, Mike Donley, a top civilian here in the Department of Defense, here at the Pentagon, will be named the new secretary of the Air Force.

But what's the real bottom line here? After two mistakes in the past 12 months or so with nuclear components and nuclear weapons, a furious Defense Secretary Gates is saying the new leadership is vital. And in fact, the secretary hitting the road later today to visit a number of U.S. Air Force bases to talk to the troops there and tell them the new leadership was vital, that he had to fire these officials.

Our senior Pentagon correspondent, Jamie McIntyre, will be traveling with the secretary to those Air Force bases and be reporting later -- Tony.

HARRIS: OK. Barbara Starr at the Pentagon for us.

Barbara, appreciate it. Thank you.

COLLINS: Quickly want to get this out to you. It looks like Senator Ted Kennedy is going home today. We've been able to confirm this through the Duke University Medical Center, that indeed he has gone home, or is heading home. I am understanding that to be the case. You of course remember just a week ago the senator had surgery to remove that cancerous tumor in his brain.

We've gotten a little bit of information from his office as well. Just moving forward here to let you know what to expect over the next several days, or maybe even weeks.

They are basically saying that he's very thankful for the extraordinary care of the doctors and the nurses at Duke. But also in the interest of the family privacy, there will not be regular updates regarding the senator's daily schedule or treatment plans moving forward.

So probably don't expect to hear too much from the family, as you just heard there. They would like to protect their privacy.

So once again, Duke University Medical Center is confirming that Senator Ted Kennedy has left the hospital. Not wanting to discuss about what time he left, apparently, but that, indeed, is the case. So don't look for any video to be coming from that either. Already protecting the privacy, as you would imagine, of the family of Senator Ted Kennedy.

As you well know, we are talking issue #1 today. Is your health now suffering along with the nation's economy? Anybody who is struggling to pay bills can tell you about the physical and mental toll.

Here with a closer look now, CNN Medical Correspondent Elizabeth Cohen.

So, yes, I mean, obviously, this can sort of bleed into your health if you're constantly worried about your finances or gas prices, or maybe even your own health care and the cost of that.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Right. You've heard the term "You're going to worry yourself sick."

COLLINS: Yes.

COHEN: It actually can happen. And not just sort of sick in the head, but sick all over the body. But let's take a look at how worried Americans are.

There was a really interesting survey done by the American Psychological Association. In 2007, 74 percent -- that's three out of four people -- said that work or money was stressing them out. Now, compare that to just the year before. It was only 59 percent. That is a big jump for one year.

And Heidi, I can't wait to see what this year's survey showed, because so many things have gotten worse. I'm afraid to think.

COLLINS: Yes, I mean, it seems like -- but you're always worried about either your financial situation or your job. I mean, you know, I'm surprised that those numbers went up as much as they did.

COHEN: Sure, because the economic situation has gotten so much worse.

COLLINS: Yes. Yes, absolutely.

All right. So what about the physical manifestations? I mean, where do you start feeling it?

We were joking last hour, this crick in my neck has been here for like three weeks.

COHEN: Right. Right.

COLLINS: And it seems to be anywhere in your body, right?

COHEN: Right, that's one place that stress can show up. Right, head to toe. Head to toe is where stress can show up.

And so we have a little head-to-toe model we want to show you...

COLLINS: Excellent.

COHEN: ... that highlights the jaw. TMJ, very painful. And that can be a result of stress.

And stress can affect your heart. And I don't mean that in sort of a poetic way. I mean that in a literal way, that stress can make your blood pressure go up, which has a bad effect on your heart.

Stress also affects the digestive system, everything from nausea to stomach pain. And really, stress affects the entire body, because it weakens your immune system. The more stressed out you are, the harder time you have fighting illness. Also the harder time you have of getting a good night's sleep. So it really affects everything.

COLLINS: As I'm yawning.

COHEN: Yes.

COLLINS: So what can you do? I mean, you should go and have a lot of massages, or you should just try and chill out, or talk to somebody about it?

COHEN: You know what? All of those things work in varying degrees for people.

COLLINS: Yes.

COHEN: Some people pray, some people get counseling, some people go on medication.

But there's one thing that I think people forget to do sometimes; which is to look at the source of the stress -- money -- and try to work that out. Because once you work out what to do about your financial situation, that's going to take away some of the stress. There's something called the National Foundation for Credit Counseling. It's nfcc.org. And when you go there, you just put in your zip code and it will tell you a variety of places you can go for free financial counseling.

So, tackle the problem, and that will help with the stress.

COLLINS: Very good.

All right, Elizabeth Cohen, appreciate that.

HARRIS: A day at the beach ends with a run for cover.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It was just a few families that went to go find cover from the rain and wait for the storm to pass just like all of us.

UNIDENTIFIED FEMALE: One minute you're on the beach, and the next minute it was -- lightning striking everywhere.

(END VIDEO CLIP)

HARRIS: Yes, the shelter from the storm turns out to be its target.

(COMMERCIAL BREAK)

COLLINS: A lightning storm in Connecticut kills one person and injures four others. People say they were just enjoying a day of fun at the beach on Sunday when a storm moved in. And then, lightning hit the shelter where they had gone to get out of the rain. A state official says lifeguards had ordered everybody to get off the beach before the lightning struck.

Boy, that's a story you don't like to hear very much. Underneath a shelter? Doing exactly what they were supposed to be doing? Well, you want to be inside if you can.

HARRIS: Yes.

JACQUI JERAS, AMS METEOROLOGIST: Safe building, sturdy structure is the best place to be when something like that happens. And a good reminder of the 30/30 rule -- if you hear it or if you see it, you want to wait 30 minutes to go back outdoors before you know that it's going to be safe.

Our other big issue today, we want to remind you about safety too, is flooding. Don't drive through it. That's the No. 1 way that people get killed in flooding situations. And boy, we have got a lot of water out there all across the Midwest.

Take a look at this map, really telling you where the worst of it is. And these -- this is all the stream gauge information from the USGS, and all the blue and black that you see there, that means it's very abnormally wet. All the red that you see down there in the southeast, that means it is abnormally dry.

Look at all the black, that's the worst of what we've got there across the Midwest. And notice all the black across eastern Iowa, all of it also across southern parts of Wisconsin. We've been tracking conditions in Waukesha, Wisconsin. I have a live picture to show you just about an hour and a half ago, we showed you this very same picture. And those streets were dry.

That is the Fox River there coming out of its banks at this time. There you can see people just driving their bikes right on through that. That's some nasty water. Not a good idea. But it's at least three feet over flood stage. It is expected to crest today. And of course, all that flooding moving down river as well.

Also have a lot of flooding across parts of Oklahoma, on into Missouri. More rain expected in the states like Indiana that have already been hit so very hard. But drier weather is going to start to build back in behind it. So Iowa, I think the worst it is over for you.

Buy the way, we're looking at a historic crest on the South Skunk River in Ames, Iowa. It looks like we may have some extensive flooding in and around Iowa State University.

Just a sampling of some of the rainfall totals from over the weekend. This is just two-day totals. Reno, Minnesota, just over 10 inches. In Milwaukee, that was a record for you, 7.28 inches. It's already the third wettest June on record in Milwaukee. What are we, not even to the 10th yet; are we the 9th today?

COLLINS: We got a long way to go either way.

JERAS: Yes.

COLLINS: All right, Jacqui, thank you.

HARRIS: Thanks, Jacqui.

We are keeping a tight focus on the economy today. And we want to know what's your view. According to a new CNN Opinion Research Corporation Poll, the outlook is pretty gloomy actually. Late last week, about 22 percent of you described the economy as good. Now, that marks a steady slide from September when 54 percent of Americans gave a rosy assessment.

But you may be surprised by this sign of optimism -- 52 percent of Americans predict the economy will be good a year from now. And while 78 percent now describe the economy as poor, only about 46 percent expect the same sour conditions a year from now.

The economy sputters, your job disappears, what now?

CNN's Deborah Feyerick is outside Detroit where laid-off auto workers are reinventing themselves and their careers.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): 38-year-old Michael Almada grew up in Michigan, knowing he was destined to work at one of the big three carmakers.

MICHAEL ALMADA, NURSING STUDENT: My father and my cousins worked at Ford. A lot of friends I knew worked at Ford. It's a big family.

FEYERICK: But the auto industry got hit hard. Shifts were cut; overtime pay disappeared. And after almost 10 years handling heavy machinery, Almada realized it was time for Plan B. (on camera): Did you know immediately that you were going to go into nursing?

ALMADA: Pretty much. Because I gave it some thought when the rumors to the buyout were happening.

FEYERICK (voice-over): In fact, nursing is one of the most popular new jobs in Michigan for out-of-work auto workers like Almada. The pay is good, demand is high, and in many cases, automakers are picking up the tab, four years of tuition for training, as part of certain buyout packages.

(on camera): Did you think about long-term when you made the change?

ALMADA: Sure. There's never going to be a shortage of sick people, you know.

FEYERICK (voice-over): Almada, who is married and who spent five years as an Army medic, just finished his second year at Michigan's Oakland University.

Tasondra Watkins, a former Daimler Chrysler assembly line worker, will graduate from there as a nurse in January.

TASONDRA WATKINS, NURSING STUDENT: From the plant where I came from, there were a lot of people talking about starting nursing programs because we know that the medical profession, primarily nursing, has a shortage.

FEYERICK: And even though Almada thinks the auto industry likely pays more than nursing, he says he has no regrets. In fact, some of his cousins still work at the plant.

ALMADA: Being on the outside of it actually feels a lot better than being on the inside.

(END VIDEOTAPE)

FEYERICK (on camera): Now, there are jobs available, but like Almada, it likely means going to college, developing new skills and even studying mathematics. And that's not the easiest thing to do. The supervisors here at this Schoolcraft College in Livonia, Michigan says that he expects in the next couple of years about 60 percent of all his students enrolled will be adults -- Tony?

HARRIS: Hey, Deb, so -- what fields are we talking about? Where are the jobs?

FEYERICK: Well, the growth areas are likely to be manufacturing. But high-end, high-skilled manufacturing. Also, the medical field, as well as electronics.

Also these newly emerging fields -- nobody knows exactly what they are. But when you think about computers or cell phones or even the gaming industry, those jobs didn't exist ten years ago. Now those jobs exist, and those kinds of fields likely expected down the line, Tony.

HARRIS: And we keep hearing there will be jobs in green technology down the road as well.

Deborah Feyerick for us this morning.

Deb, good to see you. Thank you.

And as we have mentioned, more than three quarters of Americans now rate the economy as poor. It is just one of the stories on our Political Ticker. Just log on to CNNPolitics.com, your source for all things political.

COLLINS: When the economy hits home, debts climb and your budget shrinks. Is there anyone who will help?

One answer, ahead in the NEWSROOM.

And in this unstable economy, you never know when you'll need some extra cash in a hurry. Ali Velshi has tips that are "Right on Your Money."

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ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT (voice-over): Protect yourself. When it comes to this economy, having easy access to cash gives you a safety net for the unexpected, like losing your job. So you should have enough on hand to cover your lifestyle for several months.

WALTER UPDEGRAVE, SENIOR EDITOR, MONEY MAGAZINE: For my emergency reserve, there's three to six months that I need. Your primary concern here is safety. You're not trying to get the absolute highest yield.

VELSHI: The key is putting your money in an investment you can withdraw from anytime without penalty.

UPDEGRAVE: Security is of utmost importance. You want to stick primarily to savings accounts, money market accounts, short-term CDs. You want to do the best that you can within those categories.

VELSHI: So shop around. And remember, this is a low-risk, low- reward investment. That's why finding the best rate is your best bet.

UPDEGRAVE: You're still probably a little bit below 4 percent, so you may be still losing out a little bit to inflation. But you can still do a little bit better than, for example, just getting the average return, just automatically going to your local bank.

VELSHI: And that's "Right on Your Money."

Ali Velshi, CNN, New York.

(END VIDEOTAPE)

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HARRIS: OK. Something new for you techies. Apple is expected to unveil the next generation iPhone today. The combination iPod, phone and Internet device was first introduced a year ago. The new iPhone 2.0 will likely feature, get this, Heidi, 3-G wireless technology. Pretty fancy.

COLLINS: That is -- zippity do-da fast (ph).

HARRIS: Come on now.

Much faster Internet access. The new iPhone is expected to be available mid-June. What is that, next week?

No word on the price just yet.

We knew it was only a matter of time before gas prices would hit $4 a gallon as a national average. Where do we go from here? We've got a good idea.

Let's check in with Susan Lisovicz at the New York Stock Exchange.

And Susan, I understand you can start us off with a bit of breaking news.

SUSAN LISOVICZ, CNN CORRESPONDENT: That's right, and it's directly related to fuel prices, Tony.

American Airlines raising prices by $20 on domestic round-trip fares in yet another attempt to stave off those skyrocketing fuel prices. Airlines have already raised fares about a dozen times this year. We have a whole bunch of major carriers that have already matched American's latest hike -- United, Delta, Continental, U.S. Airways. We're waiting on Northwest to see if they, in fact, will raise fares again.

So you're getting hurt when you fly. You're certainly getting hurt when you drive. It's $4 a gallon gas. AAA (AUDIO GAP) national average is $4.02 a gallon. And almost everyone agrees that it's going to go even higher. Oil prices soaring to an historic level on Friday. A jump of nearly $11.16 a barrel in two days at the end of last week. That increase won't show up at the pumps for another week or so.

Gas prices up nearly 30 percent from a year ago. Some analysts now say this is the worst shock Americans have had to deal with since the OPEC boycott of the early 1980s. Those were the days when you had like alternate days to get gas.

HARRIS: That's right.

Susan, it has to be more than supply and demand that was responsible for Friday's runup. That was insane -- $11 on Friday alone?

LISOVICZ: It was a frenzy. It was a little scary, because it was such a surge into oil. But fundamentals do play a big part, Tony.

As we've said many times, the booming economies in China and India are requiring huge amounts of new energy. Another factor, we talk about this a lot, too, the weakness of the U.S. dollar which tends to drive money into commodities such as oil. Some people say oil also is an investment bubble, similar to what we saw with tech stocks a few years ago. More recently with housing prices. But there's no way of knowing when or even if it will pop.

We also know speculation, riding the trend, is also responsible. That's legal, but government regulators are looking to see if there's any legal manipulation of the market taking place. In other words, a whole lot of blame there.

In the meantime, happy to tell you, oil's down nearly $2 a barrel, but still above $136 a barrel. There's a rare bit of good news, Tony, from the housing market. The number of homes under contract to be sold, unexpectedly rose by more than 6 percent in April. Some folks were bargain hunting.

And there is some bargain hunting today on Wall Street. The Dow Industrials showing a little bit of a bounce. Some people call it a dead cat bounce. We'll just stick to bounce. The Dow's up 92 points, or about three quarters of a percent. NASDAQ still struggling, it's down two-thirds of a percent. Shares of Apple down 2 percent even though our expectations are running high ahead of the introduction of the new iPhone, which your son is surely going to want because it's even better than the last one.

HARRIS: Isn't that the truth.

We're going to watch the afternoon session with you, because Friday's afternoon session was just crazy.

LISOVICZ: My knuckles were white. I was just holding on.

HARRIS: We'll see you then. Thanks, Susan.

LISOVICZ: You're welcome.

COLLINS: The economy, you say it's No. 1 -- and -- issue No. 1, I should say. For many personal finances, they're nothing short of a crisis. So who can help?

CNN's Rusty Dornin has some great information for us. She's coming to us from the Atlanta suburb of Duluth.

Hi again, Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Well, Heidi, I'm at the Consumer Credit Counseling Service.

I had no idea that if you're in really deep financial debt, you've got problems, maybe your house is going to be foreclosed on, they have 80 counselors here, and there are three other offices nationwide that you can call anytime to find out some information to help out. People like counselors here, like Lamala Dashi (ph), will help you step-by-step get through the process.

And to tell us a little bit more about it is Sue Hunt.

What are the conditions that people are describing when they do call up? You said the housing is the worst thing, usually.

SUE HUNT, HOUSING COUNSELOR MANAGER: Well, there are people concentrate on is helping people get caught up on their mortgages. We had over 30,000 people call us last year. Most of those people by the time they called us, were about two and a half months to three months behind already on their mortgage. And that is a real problem. We have to really get in there and help those folks.

DORNIN: So, what are you telling them to do?

HUNT: What we'd like to tell people to do, as soon as they think they might not be able to make a mortgage payment on time, is to either check with your lender, or call an agency. A nonprofit agency like Consumer Credit Counseling Service, that will provide you with free counseling to let you know what your priorities need to be, how to work with your lender, and how to keep from losing your house and stay in your home.

DORNIN: OK, let's hear from a woman we spoke to last week, Jeannett Hargis, who did exactly that about a month ago. Her house was scheduled to be foreclosed on July 1st. She called the counseling service here.

Let's listen.

JEANNETT HARGIS, CCCS CLIENT: And we called, and it was a three- way call. So a counselor in the loan modification department got on the line and she told them that I was on the other line and we talked. And she told them that I wanted to save my home. And I did have $1,000 at the time to send them if they were willing to take that. And he said, well all I can do is take -- read over the information that you sent me. And I will go from there and get back, hopefully within a week.

(END VIDEO CLIP)

DORNIN: Now, apparently she was able to even lower her loan payment.

HUNT: Right.

DORNIN: And you're saying the lenders are sort of stepping up on all of this.

HUNT: They really are.

We find more and more that lenders are willing to help people that have fallen behind on their mortgages. And that's -- what scares us a little is that 50 percent of the people who go to foreclosure, never call their lender. So we want people to call us or call their lender. What we find is that even if you were rejected two or three weeks ago, lenders are updating their toolboxes of loss mitigation options and there might be something available for you now, that wasn't there a few weeks ago.

DORNIN: Great. Thanks for joining us.

Sue Hunt here at the Credit Counseling Service in Atlanta.

They're just saying, look, pick up the phone and you can get some free advice on how to get out of the jam -- Heidi.

COLLINS: It doesn't get any better than that. All right.

CNN's Rusty Dornin, for us in Duluth, Georgia. Rusty, thanks.

HARRIS: And back in a moment with an amazing rescue at sea.

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HARRIS: You know, we had spent a good deal of time following the story on the flooding in the Midwest, this morning. And new pictures into CNN.

This is the Root River in Racine, Wisconsin. Take a look at these images. And in a wider view, you will see that it has certainly overflowed out of its banks right now. We've been following the story of flooding in all of the homes that have been damaged. The families impacted in Iowa.

Susan Roesgen, is in Columbus, Indiana, as well. But these pictures in from Racine, Wisconsin, of the Root River. You can see some homes flooded there. More structures being challenged as well.

Jacqui Jeras, wrapping up with us in the NEWSROOM. And Chad Meyers will pick up at the top of the hour, right here in the CNN NEWSROOM.

COLLINS: Rescued over the weekend, speaking out last hour. Five people plucked from the Gulf of Mexico after a 26-hour ordeal. One man died helping the others escape a sinking sail boat. You're looking at a Coast Guard search light now, zeroing on the survivors adrift in the choppy waters, you can see. Four college students and a safety officer were hoisted onto the chopper.

(BEGIN VIDEO CLIP)

STEVE CONWAY, RESCUED SAILOR: And before I could even release the main sheath that holds the main in tight to take the pressure off of it, the boat flipped onto its side. And that's the point where the keel hit hard. Because the dynamic pressures on a sailboat are such that it can't stay upright if the keel's not there, if it has a counterbalance. That was maybe 15 to 30 seconds. And then about 15 seconds later the boat turned hurdled, and I was hanging from my safety harness and released the emergency release and went into the water.

A few seconds later Steve popped up in front of me and the other crew (INAUDIBLE) Travis, was down below. He eventually exited the vessel. Roger pushed both Steve and Travis out through the hatch with the water coming against him. It's very hard to get out for yourself in that situation. And the other two young men were on deck with me. So, we all ended up in the water and we immediately got together.

(END VIDEO CLIP)

COLLINS: The men, who as you can see from some of these pictures here, most of them were actually Texas A&M University students, were on board the sailboat, The Cynthia Woods, when it capsized during a regatta. Divers later recovered the body of the boat's other safety officer, Roger Stone. He is being hailed a hero.

HARRIS: All right. And still to come, a dog, a toad -- yes, a dog, a toad, a strange lunch date. It is one of the stories everybody is talking about, and clicking on this morning.

Back with the best from CNN.com after break.

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