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Another Bruising Day on Wall Street?; North Korea Nuclear Plant Cooling Tower Comes Down; Levee Breached in Winfield, Missouri; Zimbabwe Holds Election Despite International Pressure; Dangerous and Addictive Drugs Sold on the Internet Without a Prescription
Aired June 27, 2008 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Show me the money. Today, the Democrats appear at a joint campaign rally. Their first that's taking place appropriately enough in a town called Unity. And it's live on CNN, of course.
And a symbolic beginning of the end to North Korea's nuclear program. At least that's the message from Pyongyang. A nuclear plant cooling tower comes crashing down today in the NEWSROOM.
But we begin with the U.S. economy, battered bruised and bracing for another tumultuous day. Let's begin on Wall Street, just last hour, the Dow opened at its lowest level in almost two years. Let's see how the market is doing now, taking a check at those numbers there. We see if it's down in the negative by just two points though. And now it's in the positive three.
If we keep watching, maybe we'll get the plus signs. We're going to be watching the big board all day. But once again, yesterday it was certainly a different story. The Dow plunged 358 points by the time the day was through, that's more than three percent of its total value.
And a jaw dropping loss of 19 percent since its record high just last October. One big reason, yet another surge in oil prices. Overnight trading sent oil futures to a new record, more than $142 a barrel. And OPEC adds to the anxiety saying oil could hit $170 before the end of summer.
And here's another disturbing snapshot. The nation's largest automaker stock, at its lowest level in more than 33 years, General Motors taking almost 11 percent just yesterday.
Well, will this be another bruising day for your wallet? Boy, I sure hope not. CNN personal finance editor Gerri Willis is keeping an eye on your bottom line. Like we said to Ali last hour, how much more can we take?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: I'm done, I'm ready for stock to go up. I think we all are but you know, look the real news here I think is oil prices are really running the stock market. Where oil goes, stocks go in the opposite direction. And you're continuing to see oil rise today at about 140, it's between 140 and 142 today. That represents an increase. Yesterday's high just below that. So, as oil prices continue to go up, the stock market continues to sell off.
But, you know, Heidi, as we say at times like these, you never want to sell into the teeth of a sell off, a stock market sell-off if you're worried about your retirement funds because you're going to have to come back into the market eventually and you don't want to buy the same stocks again at a higher price. So, that's always bad news.
But if I can tell you where the stock market was going today, I probable wouldn't be sitting here. I'd probably own my own island somewhere. But you know, the good news is, you know, we're 14 points here. The sell-off right now, this moment, is not continuing but you never know what is going to happen in the coming hours and the coming days.
COLLINS: I know, at least it's not Friday the 13th, though.
WILLIS: Good point.
COLLINS: You know, it could be worse. Thank you, Gerri.
WILLIS: My pleasure.
COLLINS: We're going to check in a little later on. I just to let you know what we're showing here. We have sort of what we call a big little in television. And so we have the Dow Jones industrial average, the big board as we call it in that little tiny box, there. So you can keep an eye on it.
In fact, we can check in directly at the New York Stock Exchange now with Alison Kosik. She is there live to tell us a little bit more about that mood. We keep asking about the mood. We want everyone to be happy, Alison.
ALISON KOSIK, CNN CORRESPONDENT: I know, wouldn't that be great? Well, right now, stocks really can't figure out where they want to go. They've been fluctuating, we started in the negative, went to the positive and the negative again, and now in the positive.
Let's go to the numbers and show you. The Dow industrials higher at 21 points, NASDAQ also up about seven. Investors right now are really anxious about the oil price record we set yesterday at the close, over $139 a barrel. But, at the same time, they're relieved about increases in personal income and spending. That was helped by those economic stimulus checks. In fact, they helped to boost consumer spending by the biggest amount in six months.
But you know, at the same time, Wall Street remains concerned about inflation, about the health of the financial sector, and, of course, all of that impacting future growth. And that of course is what's leaving investors kind of shrugging their shoulders what are we doing today.
COLLINS: Yes, exactly and they're worried about it. We're worried about it at home, too.
KOSIK: Of course. COLLINS: All right. CNN's Alison Kosik, appreciate that Alison.
And now to the big story from overseas this morning, nuclear destruction. The most visible symbol of North Korea's nuclear weapons program, blown to smithereens.
CNN's chief international correspondent Christiane Amanpour is one of the few U.S. reporters to witness that implosion. She is reporting from Pyongyang.
(BEGIN VIDEOTAPE)
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: North Korean officials took the international press corps to a hillside overlooking the Yongbyon nuclear plant. And after a series of signals and warnings, they blew up the cooling tower.
They did this in front of the press corps and the U.S. State Department delegation as well as U.S. technical experts and IAEA monitors who maintains a continuous presence here as Yongbyon has been systematically disabled since last summer. The explosion caused a massive amount of smoke. And as people were watching, there was a stunned silence.
Afterwards, the U.S. official gave a quiet handshake to the North Korean director of safeguards at Yongbyon. The U.S. official said this was a significant moment and a significant move towards disablement.
He also says that this move puts the U.S., North Korea, Japan, China, South Korea and Russia on the road to the next phase. The next phase involves full dismantlement of Yongbyon and also handing over and fully accounting for the plutonium, including weapons that Yongbyon has produced.
I'm Christian Amanpour in Pyongyang, North Korea.
(END VIDEOTAPE)
COLLINS: And on to politics now, Barack Obama, Hillary Clinton, their first joint campaign appearance just a few ours from now. The former rivals will appear together in Unity, New Hampshire, in hopes of uniting divided Democrats. The private fundraiser last night, Clinton introduced Obama to her top donors. These are exclusive cell phone pictures from inside that meeting. Both Clinton and Obama appealed to their supporters to come together.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: It is still possible I think for both of us to win and the American people, but only if we are unified and if we understand the stakes involved and understanding that there are people who need this country to change far more than any of us in this room.
SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: We have to make it a priority in our lives to elect Barack Obama the next president of the United States.
(END VIDEO CLIP)
COLLINS: In another show of unity, Obama and his wife each donated $2,300 toward Clinton's campaign debt. So a lot at stake for Clinton and Obama in today's joint campaign appearance.
Senior political analyst Bill Schneider live from Washington now to talk about that and more. Of course, you have to hold an event like this, Bill, in a place called Unity. So, how much can Hillary Clinton really help the Obama campaign?
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, she can help him with some crucial groups where he has been weak in the past. That's not particularly women. Women are coming around and voting for Obama, according to the polls, but older voters. They were very skeptical of Obama in the primaries and a lot of them seem to be voting for John McCain right now. She was very popular with older voters, with seniors. She can help Obama with that constituency.
And one other where he was very weak was, conspicuously weak, was Latino voters in state after state including Puerto Rico. The Latino voters went heavily for Hillary Clinton. She and Bill Clinton could help bridge the gap between the Obama campaign and the Latino vote and help deliver them because they are important in some very big swing states, particularly in the west and in the south.
COLLINS: Yes. And another interesting thing here we have seen this implosion at Yongbyon, the North Korea nuclear facility, well at least the cooling facility. That has got to be seen, does it not, as a success of some type for the Bush administration? But you have to wonder, does that then translate to success for the McCain campaign, or at least a favorable feeling toward Republicans?
SCHNEIDER: Well, I can certainly assure you that that picture will be shown a lot of times to the Republican convention as a great success for President Bush's diplomacy, a country that was on the axis of evil is going to be removed from that list. He's going to remove the sanctions, the president said, in a matter of weeks, and the relations are beginning to improve. And that is going to be seen, going to be portrayed as a triumph.
Will it help McCain? Well, the Democrats are arguing that what it does is validate Obama's argument that diplomacy is the way forward, that diplomacy accomplishes a lot more than military force. And that's the way that he's determined to approach our relations with Iran.
COLLINS: That being said, will we hear Obama or Hillary Clinton talk about that today, North Korea?
SCHNEIDER: Maybe. You might very well hear it. But they're going to use it to try to justify their approach while the Republicans are going to say, what really worked here was strength and resolve.
COLLINS: All right. Well, let' talk about the markets because we have been watching. And boy, yesterday was brutal. Right now we're to the positive by about 11 points or so. Not a lot. Gas prices also rising. McCain and Obama getting traction on these issues? I mean, obviously this one would go toward the Obama camp.
SCHNEIDER: No question that it's helping Barack Obama who's doing very well in the polls. There have been a number of polls that have come out, and the swing states, they all show Obama making progress. And if I had to point to one single thing that's driving support for Obama right now, it is gas prices. People see them on the highway everywhere they go. They have to pay them. They're creating a big hardship for Americans all over the country. No one ever dreamed of paying $4 and more for a gallon of gasoline. That's creating anger, resentment.
McCain is trying to make that issue work for him. He's come out with an ad talking about a plan to lower gas prices. What it is is not entirely clear, but at least to make the United States more energy independent. The problem is, McCain has to really play catch-up on this because he is the Republican candidate and this is happening under a Republican president.
COLLINS: All right, Bill Schneider watching all of it for us. And we will be watching well through that 1:00 hour when this meeting takes place again in Unity, New Hampshire. Thank you, Bill.
SCHNEIDER: OK.
COLLINS: A ferocious wildfire to take a look at now inching closer to Big Sur, a scenic tourist town on the California coast. Right now, the fire is burning in the Las Padres National Forest, just about a mile south of Big Sur. Nearly 600 homes are threatened. Firefighters have beefed up their lines near those populated areas and closed a long stretch of the Pacific Coast highway. The Big Sur blaze just one of hundreds scorching northern and central parts of the state.
Midwest flood zones facing another threat. Heavy downpours could drench the region today, making this situation even more dangerous. You're looking at new pictures of a levee in Winfield, Missouri, a portion of it just giving way. Officials say eventually the water pouring through there will inundate a rural area. And rig can push frozen rivers in Missouri and Iowa back up as well, possibly triggering flash floods.
There are also health concerns as you might imagine. Tests show flood waters contaminated with bacteria. Officials warn everyone to stay out of that water.
Reynolds Wolf in the weather center now to talk a little bit more about what people can expect in the Midwest today, Reynolds.
REYNOLDS WOLF, CNN METEOROLOGIST: Well, what it's going to be a mixture, Heidi. In some places the situation is going to be improving, other places it will be getting worse. Obviously, it goes down saying that in Winfield with the levee breach, you just saw images of that moments ago. It could not be worse. The water is rushing now in many places, going to be affecting spots like Winfield, perhaps communities like Old Monroe to the north of St. Louis. That's the bad part.
The good news, and there is some good news with this, you have to take it with a grain of salt, is that in places like St. Louis or farther to the south of Memphis, we have a live image in Memphis at this time. Conditions will be better, in fact, the river won't be quite as high. Do we have that live image from Memphis? The live tower cams.
Here it comes right there. Again, we got a great shot of the sky. Below, you see the tree line, then off in the distance you see the waters of the Mississippi River flowing from north to south. And there's going to be that bubble of water, that rising area that's going to come through. But again because of the levee failures in places like as we mentioned Winfield, it's going to relieve a bit of that pressure.
Still, we're seeing more rain in the forecast. Some of it moving just to the east of places like say Missouri and then further back out to the west, near Kansas City, we have some stronger developments. It's been a loud morning for you. It's going to get a little better by midday and into the afternoon.
We're expecting some drier air to move in as this rainfall moves back into spots like Missouri and into Arkansas. Now we go farther into the west, it is a beautiful area. We're talking about now, say, we're talking about say Big Sur. Big Sur is going to be really dealing with some rough weather today in terms of fires, not rough in terms of storms.
But if you want to have something that is going to really knock some of these storms out, what you want is a lot of wet weather. Not going to be the situation. Today, we're going to have some strong storms moving through, some high-elevation storms, not rain-makers, but rather storms that could create quite a bit of cloud to ground lightning.
Remember, these lightning strikes are seven times hotter than the surface of the sun. So when they hit the dry foliage, in places like Big Sur, back in the Las Padres National Forest, the dry foliage, the chaparral, goes up like a tinderbox. And that is going to be a tremendous danger for many people.
Plus, at the same time as breeze comes in it tends to go right through some of those mountain passes and actually begins to speed up. So you have again dry conditions, you have the lightning, you have the wind that's pushing through very quickly. Kind of like bellows, if you will, say in a fire. And that could be the problem.
COLLINS: Sounds like a desert.
WOLF: Yes. Very much so. Really, really dry territory. Now, I mentioned it's going to be dangerous for a lot of people. This is not really a widely populated area, but for the firefighters out there, these fires can move very quickly. Back to you.
COLLINS: All right. Well, we appreciate that, Reynolds. And we will be watching that situation.
WOLF: You bet.
COLLINS: Also, I want to let you know regarding the flooding situation that Reynolds has been covering alongside us and this levee breach that happened once again in this town that you've probably heard of by now, Winfield, Missouri.
There's going to be a press conference coming up in about 15 minutes or so. It's going to be held by the Lincoln County Emergency Operations command and the Army Corps of Engineers. They're going to talk more about what their plans are. It's the Pin Oak levee breach and obviously a great concern to them right now. So, we'll keep our eye on that one for you, coming up in about 15 minutes.
Meanwhile, overseas now to an election that has been called a sham by many people, including President Bush. The voters are trickling in in Zimbabwe. We're getting an update from our international desk coming up right here in the NEWSROOM.
(COMMERCIAL BREAK)
COLLINS: Quickly we want to show you this pretty unbelievable video that we have of a medical transport helicopter crash. Here's what we know, according to our local affiliates. It's happened, as you can see, by the small lettering there at the top of your screen, in Ash Fork, Arizona. Our affiliate there KTVK bringing us these pictures.
We understand that all three crew members, that would be a pilot, a nurse and a paramedic are alive but of course are on their way to the hospital for treatment. Not sure of their extent of injuries. So that is some terrific news. At least at this point.
Also, we understand there were no patient onboard, also good news at this point. So, again they were responding to a patient transport request from a ground ambulance. So, a different type of accident that they were trying to get to and help somebody out. So we'll keep our eye on this one. If we get any more information, we're going to let you know, coming out of Arizona today.
COLLINS: And now back to our overseas story of the day that we've been following, a bizarre runoff election happening right now in Zimbabwe. It's a one man runoff in fact between a man who's been in power for 28 years and pretty much no one else. We've been hearing reports all morning of violent intimidation tactics to get people out to the polls.
Isha Sesay is at the International Desk with the very latest. Unbelievable reporting we've been able to get directly from South Africa, at least this morning, saying, you know, if you don't go and get in line and vote for the guy we want you to vote for, your life is in danger.
ISHA SESAY, CNN INTERNATIONAL CORRESPONDENT: Absolutely, Heidi.
Shocking stories coming out of Zimbabwe on this day, it's a one- man runoff because the man who was supposed to challenge the long-time dictator, Robert Mugabe, dropped out of the race last week citing violence against supporters. Dozens of members of his party have been killed and thousands have been injured.
Happening right now in Zimbabwe, we want to show you, media reports saying that voters are being coerced, being forced to go out and vote in many locations. Zimbabwean journalists say that militias loyal to Mugabe are going door to door, Heidi, in townships outside the capital, forcing people to head to the polls. There has been strong international pressure from the U.N., President Bush and others to call off this election, but to no avail.
Here's what a defiant Mugabe had to say to his critics today.
(BEGIN VIDEO CLIP)
ROBERT MUGABE, PRESIDENT OF ZIMBABWE: I want to see a finger pointing at us and say we've done wrong. I will want to see that finger! And see whether it's clean or dirty. I want to see in Africa, in the Africa Union, I want to see that finger. Let it be pointed at me.
(END VIDEO CLIP)
SESAY: We want to bring you now pictures of Mugabe voting from earlier this morning. There he is dipping his finger in pink ink. And Heidi, it's that pink ink that makes Zimbabweans so very nervous. They say if they can't show their stained fingers, then Mugabe's militia will know that they have not voted and they fear retribution.
Well, under Mugabe's reign, Zimbabwe's fallen into deep poverty. Inflation is so high. Most people can't afford basic food items and life expectancy at this point in time stands at just 39 years. It remains to be seen, Heidi, if this so called sham elections.
There he is dipping his finger in pink ink. It's that ink that makes them very nervous. They say if they can't show their stained pictures, the militia will know they haven't voted and they fear rhetoric. Under Mugabe's reign, they have fallen into poverty. Most can't afford basic food items and life expectancy stands at just 39 years. It remains to be seen, Heidi, if this so-called sham election will produce anything other than Mugabe as the winner -- Heidi.
COLLINS: That would be shocking if it produced anything but that. And obviously it makes you wonder about Morgan Tsvangirai. What have we heard about him? He was at the Dutch embassy for a while. Where is he now?
SESAY: A short time ago he left the Dutch embassy where he has taken refuge in the last couple of days saying he's doing that for his safety and he headed to his home and he held a news conference. In short, what he said is that there is nothing legitimate about this vote. He basically condemned the entire process and, as we understand it, he's making his way back to the Dutch embassy now, Heidi. But we'll continue to monitor this story right here at the International Desk and bring you the very latest.
COLLINS: Very good. Let us know if you need to come back. Thank you, Isha.
Tough times. Your money questions may now be more important than ever. Gerri Willis is here to answer your e-mails.
(COMMERCIAL BREAK)
COLLINS: Quickly want to get to the big board once again for you. Right now Dow Jones industrial averages are down about 16 points, well below that 12,000 mark, resting at 11,437, and Nasdaq down about three points as well. Hopefully it won't get any worse than that because we don't want to see a repeat of yesterday. That's for sure. The Dow checking out down about 358 points so it was a brutal day to say the least.
Credit debt, retirement, savings, plunging home values. Just some of the financial concerns many of you have questions about. So, here to answer your e-mails because it's Friday, personal finance editor Gerri Willis. Gerri, I'm going to fire off the first one to you.
WILLIS: Let's go, Heidi.
COLLINS: Right off the bat. Says this, this is from Matt (ph) in California and wants to know, "My 24-year-old son is trying to establish credit but no one will give him credit because he has no credit history. What is the best/safest way to establish credit?" It's like trying to get your first job but having no experience.
WILLIS: It's circular, you know. Here's what you do, you want to look for a credit card geared towards students. So, go with the card that has a low annual percentage rate and no annual fee. Now, a lot of times, you'll be able to earn points for good behavior like not going over your limit, and paying your bills on time.
Before applying, make sure the creditor reports account activity to credit bureaus. You can go to cardratings.com to find one of these. And of course the key here is for your son to pay his bills in full and on time every month. That's what leads to a good credit score.
COLLINS: And then just give him a bunch of money. He won't have to have his own credit. No, I'm kidding.
WILLIS: No.
COLLINS: All right. Question number two from Tasha in Virginia ...
WILLIS: Yes. COLLINS: She wants to know this, "If you are in a tough situation with high credit debt, loans and cards, that have damaged your credit, would it be beneficial to write a letter to the credit bureau to explain your situation?
Yes.
WILLIS: Not really. No. Look, you know --
COLLINS: They're not nice?
WILLIS: Well, I'm not saying that. I'm just saying they just don't care. They're a warehouse of your information, they store your credit information which is sent to them by the creditors. And they don't judge you based on your debt so you don't write them a letter. You go to the people who you owe money to and write them letters.
You should be focused on reducing these balances as best you can, try calling your creditors, explaining your situation because they may work out a payment plan with you. If you need help with your debt, maybe you're in over your head, go to nfcc.org to get find a credit counselor in your area. If you just feel like you can't handle it.
COLLINS: OK. All right. Let's move on to Anny from Florida. Her question is this, "My husband and I are trapped in a housing crisis. He bought an investment house when he was still single. Now we have no option but short sale. I do have some substantial savings under my name only. Are these at any risk?"
WILLIS: Well, look, this is tricky. OK. Anny, the promissory note for the house, if it's just in your husband's name, your assets are protected. If not, then you could be in trouble on the hook for any deficiency in case the home is auctioned for less than what is owed on the mortgage. Keep in mind that some lenders will forgive a liability in the short sale. And of course, Heidi, the short sale is when you sell the house for less than you owe on the mortgage. Sometimes banks will accept that.
COLLINS: OK. Yikes. All right. Let's get to the last one here from Mike in Arkansas. He wants to know about his 401(k). We talk about this all the time. "This past week, my employer announced that they will permanently suspending their matching contributions to our 401(k) plans."
WILLIS: Ouch.
COLLINS: "What options do we have now and would it be better to stop that 401(k) and start investing money into an IRA." It's such a luxury when your company will match.
WILLIS: Well, and people don't realize that. And we could see more of this with what's going on in the economy. Look Mike, if your company isn't matching you and you need the tax deduction, you might be better off sticking with the 401(k).
However, If you don't need the deduction, you might think about opening a Roth IRA. If you would rather invest in what they call a traditional IRA, make sure you talk to your accountant to make sure that your contributions are tax deductible. Sometimes, if you contribute into a 401(k) in the same calendar year that you want to open the traditional IRA you get a problem, you don't have the same tax deduction.
And of course, if you have any questions, just send them to us at toptips@cnn.com. We love hearing from you.
COLLINS: Yes. They have a whole week to do it so come up with some really great questions like those. That's great. Gerri, we also have "ISSUE #1" coming up in about an hour and a half. What do you guys have today?
WILLIS: We got a really interesting story on how the types of charges you put on your credit cards could actually hurt you and what to do about it. We'll also talk about how to beat inflation. It's going up, up, up. Heidi.
COLLINS: All right. We will be watching, of course. Gerri Willis, appreciate it.
WILLIS: My pleasure.
COLLINS: Well, it's one of the stories that everybody is talking about this morning, the economy. Surging oil prices put Wall Street in a funk. So will the Dow bounce back from a near two-year low? It doesn't look great. We're following those numbers right here in the NEWSROOM.
(COMMERCIAL BREAK)
WOLF: Hey, America, all day we've been talking about the levee breach in Winfield, Missouri. Well, we now have some new information and a press conference. We're going to go to that live.
(JOINED IN PROGRESS)
UNIDENTIFIED MALE: ...the Army Corps of Engineers as well as the National Guard to further assess what we might do for the city of Winfield. And as Andy said, we will have that information in a press release to the media to let you know exactly what is going to take place and what is going to happen.
So, I want to thank the media for your coverage here the last week in getting us our volunteers. Without you, we couldn't have been as successful as we were. So, once again, thank you -- Andy? Andy?
Right now, I'd like to introduce Travis Pupka (ph) from the Army Corps of Engineers to explain a little bit about what occurred at the breach.
TRAVIS PUPKA, ARMY CORPS OF ENGINEERS: Hi. As you all are well aware, we've been tasked with trying to save this levee and a whole lot of effort has been expended by a whole lot of people. Say, the resolve of the landowners down there, the volunteers, the National Guard, it's just been amazing. We have managed to fight so many issues for so long, it really was an astounding effort.
This particular problem that did eventually fail, this levee, it occurred rather rapidly. It did not give us time to respond. Within approximately 15 (ph) minutes of when our guys got the notification, the breach had already occurred. This location had some muskrat holes that we were dealing with earlier in the week, some substantial sandbagging and laying some plastic on the riverside had slowed that area down and we thought we had that area relatively controlled.
Again, it's kind of hard to say what mother nature's going to throw your way and what happened over the course of the night that may have changed that situation. But again, it was a difficult road, and I wish it didn't turn out this way, but we are where we are and it was just an amazing effort in my opinion with how hard everybody worked so far.
The levee was filled to the top and then some on top of the sandbag wall. The sandbag wall that these National Guardsmen put up and the volunteers, they did a tremendous job. And the fact that that wall did not -- was not where our failure occurred speaks miles about how proficient and efficient and quick these guys got that job done.
I don't know what more to tell you. There's some pictures up here that show the boils that occurred from the muskrats earlier this week. I believe it was the 23rd that that originally occurred. It happened during the night. These pictures you see were from that morning and then later that day. You can see the amount of water that we had flowing through that area and then later that day, we had it relatively turned off. And this is a view from a little zoomed-out aerial shot.
QUESTION: Travis, can you tell us a little bit about this morning when the breach was discovered? What did it look like? How long before then had the area last been checked? How did this whole thing come down?
PUPKA: All right, some more details on that is we had three of our Corps of Engineers folks out there at about 4:00. It had not changed from what I had seen at about 7:00 the previous evening. It was flowing a -- it was a significant amount of water, but it was running clear, so we felt it was still a controlled situation at that time.
The National Guard had a continuous loop of surveillance going through the area. They notified our group at 5:03 this morning, so within the 4:00 from when we observed it to when the National Guard reported it at 5:03, it significantly changed. The report that we got from the National Guard, I have not heard this directly, so forgive me if this story evolves a little bit and we get better details later on. But what I was told was that the flow increased substantially and it was starting to push sandbags off of what was already in place.
QUESTION: (INAUDIBLE)
COLLINS: All right, we are listening in live to a press conference that's taking place there as you can see in Winfield, Missouri, where unfortunately there was another levee breach. It happened early this morning if you happened to hear the gentleman say that. This is being held by the Lincoln County Emergency Operations Command and also the Army Corps of Engineers. They said basically once they heard that this levee -- excuse me, that they were notified of a problem, the actual breach had already occurred.
So now, of course, as I bring Reynolds Wolf back in here to look at this with me, Reynolds, the whole area of Winfield they've been saying is going to be inundated by the Mississippi River.
WOLF: Oh, there's no question. You know, we were there -- let's see, gosh, less than a week ago.
COLLINS: Yes.
WOLF: And they had some 300 homes that were being affected by this, even more will be affected. Also, communities a little bit farther to the south right along parts of 79 like Old Monroe, I can tell you that in many spots, say like the Quiver River, which is just a tributary of the Mississippi, you have water that was right up to the railway tresses, they were crossing that span of water, just brushing against the top. Now, with this additional rainfall coming in, or rather water coming in, you can just see that begin to rise in many other spots.
One thing about these levees, we've been showing you all morning long about these levees. These levees have been -- many of them constructed back in the '50s, some of these back in the '60s. There is one farm we visited last week, it was the Jones Farm which is just to the south of Old Monroe, the Jones family has lived on this farm, south of Old Monroe for well over 100 years.
From what they told me, many of these levees, again, were taken care of by I guess the government back in I guess '90. Then in '93, they were told that many of these levees are pretty much the responsibility of the landowners and whatever volunteers might be able to help out. Again, that's what we were told by some of the people on the Jones Farm.
Now, these levees, again, they're made of earth. We're not talking about some steel reinforced concrete kind of structures. These tend to be again, kind of like a little bit of a wall to hold back the waters of the Mississippi or say the Quiver River in this particular circumstance. But when you have just that weight of water that's been running right up and down those burmes (ph), those big earthen structures, the structures -- you tend to have the erosion, then you have the breaks. That's what we're seeing here. That was the only levee still holding.
And that's certainly what we're seeing here. That is now -- that was only levee that was still holding. There were five ...
COLLINS: Yes.
WOLF: ...all together. Four failed, that was the last one. Now, they're all out. That's bad for certainly people in these communities. But for places likes St. Louis, no question, Heidi, it's going to be beneficial for them. Levels not expected to rise as high.
Back to you.
COLLINS: All right, we sure do appreciate that. Love looking at those maps. Reynolds Wolf, thank you.
WOLF: You bet.
COLLINS: Meanwhile, the other story we're following today, your money and the stock market. Stocks are trying to find a good direction one day after a big sell-off. Alison Kosik is watching the numbers for us from the floor of the New York Stock Exchange, now joining us with the very latest.
Where are we resting now, Alison?
(BUSINESS HEADLINES)
COLLINS: And more on this now. Oil prices soar to a new record high yesterday. And they're climbing even higher today. CNNmoney.com's Poppy Harlow has our "Energy Fix" from New York.
Hi there, Poppy.
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: Hi there, Heidi.
Well, Alison just told you how it's moving the market. A lot of momentum in the energy market these days. Yesterday, crude topping $140 for the first time ever. Earlier this morning, it topped $142. Oil has since pulled back just a bit.
But to put this in some perspective for you, prices are still up more than 45 percent since the beginning of this year. So, folks out there asking, what is going on? There's a number of factors at play here. The U.S. dollar continues to fall against the euro. Libya is threatening to cut its production. And OPEC's president says that oil prices could get as high as $170 a barrel this summer, Heidi. That is all factoring into the record move we're seeing today.
COLLINS: Yes, well, Saudi Arabia, as you well know, promised earlier this week to boost production. A lot of people said, boy, that's just not going to be enough. So, why then are prices surging? I guess I just answered my own question maybe.
HARLOW: Of course, a lot of people are ...
COLLINS: I do that.
HARLOW: ...wondering exactly that, Heidi. Energy markets are extremely volatile, especially right now. So, one little piece of news can really send prices off and running.
Now, even though Saudi Arabia said last week it's willing to boost production if the market demands it, a lot of people say hey, doesn't the market demand it right now? One analyst we spoke with is skeptical about the impact that'll have. He says production increases won't be enough and that we're in quote "inflationary spiral."
Have to think about the Federal Reserve here and its' actions factoring in to this as well. Even though the central bankers this week held very steady, that Fed funds rate at two percent, it has slashed rates from more than five percent, down to two percent. That's just on the value of our currency and it prompts investors around the world to jump into the oil market.
And you can't forget about demand. A lot of it coming from China, where this is just staggering, heating oil imports in China were 34 times higher last month, Heidi, than just a year ago.
COLLINS: Wow, well, what about gas prices? Obviously, they've been falling for most of the week, not by a lot, but you have to wonder. Are they going to turn around soon?
HARLOW: Of course, you know, it's certainly likely they're going to start climbing again. Remember, it takes about two weeks for oil prices to affect what you're seeing at the pump. And AAA says right now the national average right around $4.07 a gallon. So, even though we've seen a slight decline this week, the prices that all Americans are paying are 40 percent higher than what they were paying last year, that's weighing on American families unlike ever before.
We have the oil numbers, the latest gas numbers, a lot of information to try to help everyone save on our Web site, CNNmoney.com -- Heidi.
COLLINS: And it's a good Web site to check out.
HARLOW: Thank you.
COLLINS: All right, Poppy Harlow, thank you, appreciate it.
Scoring drugs online, so easy, even a child can do it. Who's watching the store? A CNN special investigation up next.
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COLLINS: Addictive, powerful and dangerous drugs just a mouse click away. You don't even need a prescription and there's no oversight.
"SPECIAL INVESTIGATIONS" correspondent Drew Griffin looks into it.
(BEGIN VIDEOTAPE)
DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: Dr. Tunis (ph), can I show you this prescription bottle, sir?
(voice-over): We thought after chasing down doctors, confronting a rogue pharmacy and basically exposing just how blatantly easy it is to go online, purchase prescription drugs and get them delivered to our door no questions asked, we might hear a reaction from the government on what's being done to stop it. And we did, just not the one we thought.
JOE RANNAZZISI, DRUG ENFORCEMENT ADMINISTRATION: It's not a loophole -- well, it's not a loophole. There is an agency that conduct those investigations.
GRIFFIN (on camera): There is, in fact, a loophole so big that the bureaucratic agencies in Washington are finger pointing over who should stop it. The White House sent us to the DEA, the DEA to the FDA. All the while, the government seems to be MIA in stopping Internet drug abuse.
JOHN HORTON, PRES., LEGITSCRIPTS.COM: This is a big problem and we have got a lot of work to do in this area.
GRIFFIN (voice-over): John Horton worked for five years in the White House office on drug policy. And like others, he told us prescription drugs are the new cocaine and heroin of drug abusers. And the Internet has changed the game on how it's delivered.
HORTON: There are more prescription drug abusers than there are for methamphetamine, cocaine and heroin combined today in the United States.
GRIFFIN: Full disclosure here, Horton is trying to start a business that polices Internet pharmacies to make sure they are legal. His potential customers are Google and Yahoo!. Horton says the Internet search engines make an estimated billion dollars a year advertising Internet pharmacies. Both Google and Yahoo! told CNN they do screen their pharmacies to make sure they obey the law. Horton is convinced Google and Yahoo! aren't doing much of anything.
HORTON: By our estimate, we think that only about one percent of Internet pharmacies are following those rules and verification processes.
GRIFFIN: Want proof? We bought Prozac and the anti-depressant Elavil from a site called Linepharmacy.com. We accessed the site through Google, we bought the drugs without prescriptions. Shortly after our report, linepharmacy.com disappeared from the Internet.
Want another example?
HORTON: Just the other day, we were able to pose as a minor, a 13-year-old, and without a prescription fill an order for over $500 worth of Soma, an addictive prescription-only drug, without a prescription, posing as a minor.
(END VIDEOTAPE)
COLLINS: The rest of the story? Well, after the break, we'll be talking about policing the Internet. Do online pharmacies need an enforcer?
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COLLINS: Before the break, we were talking about how easy it is to get dangerous and addictive drugs online without a prescription.
Once again, here's "SPECIAL INVESTIGATIONS" correspondent Drew Griffin.
(BEGIN VIDEOTAPE)
GRIFFIN (voice-over): There's just too much money in the search engine business, critics say, for Internet providers to cut off the flow of online drug sites. That's why Carmen Catizone with the National Pharmacy Board says companies like Google and Yahoo! enable these drug sites to sell hundreds of millions of dollars of prescription drugs a year.
CARMEN CATIZONE, NATL. ASSN. OF BOARDS OF PHARMACY: Google and Yahoo!, they're accepting advertisement from these sites and when those advertisements appear on their Web sites, people think they're legitimate Web sites and therefore they go to them.
GRIFFIN: Google and Yahoo! both told us they rely on a third company to check on and verify that the Internet pharmacy sites are legitimate. But that same company allowed a mystery buyer posing as a 13-year-old boy to buy Soma.
(on camera): After we told them about the purchase, the verification of that drug site was suspended, meaning only that they can't advertise on the search engines. You can still go to the Web site.
(voice-over): Google and Yahoo! both told us they're willing to do more and Google even told us it "has been heavily engaged on this issue, working with government agencies," though Google didn't say precisely how.
That led us straight back to the government. Actually, the government came to us. The White House office of drug policy, the drug czar, wanted to talk. Then, a day before our interview, we were told the DEA would talk instead.
When we got to the DEA, a deputy director named Joe Rannazzisi told us his agency deals only with controlled substances, like morphine and oxycodone, drugs so potentially deadly, Congress banned their sale over the Internet. But most prescription drugs, many of which are just as deadly, are not controlled.
RANNAZZISI: What I can tell you is that the drug enforcement administration has statutory authority to regulate and control the distribution of controlled substances. The two drugs you just mentioned, Prozac and Elavil are not controlled substances.
GRIFFIN (on camera): And Soma, not controlled?
RANNAZZISI: Soma is not a controlled substance.
GRIFFIN: Highly addictive drug, the one flying over the Internet. RANNAZZISI: We do some see abuse of that drug, yes. However, again, since it's not a controlled substance, I don't have the statutory authority to investigate the distribution or the illegal distribution of that drug.
GRIFFIn (voice-over): Confusing? That's why critics say it's so easy for the rogue Internet pharmacies to operate.
(END VIDEOTAPE)
COLLINS: Drew Griffin joining us now to talk a little bit more about this. It's a great story because you'd think, you know, with the cost of health care and prescriptions as well for some people, that this would be a great way to go about it. I mean, it's cheaper, right?
GRIFFIN: Well, not necessarily cheaper as we found. It's cheaper if you use a legitimate site with a legitimate prescription through a major company. These rogue pharmacies, though, are preying on people who want these drugs and actually the prices we found are much higher.
And keep in mind, Heidi, only marijuana is more abused in this country than prescription drugs. Prescription drug abuse has now surpassed cocaine, heroin, all these other drugs. So, this is a big problem.
COLLINS: Yes, I mean, I'm not altogether sure people know that readily, obviously ...
GRIFFIN: No, no.
COLLINS: ...I mean, off the top. But then, you also have to wonder, what's the reaction to all of this then? I mean, are they going to start regulating now or what's going to happen?
GRIFFIN: Well, you can see from our story that there's a bureaucratic jurisdictional problem going on. The states don't have enough power to go after all these major pharmacies. But there is a reaction now in Congress, a bill just introduced in Congress that would look at the rogue pharmacies. We've heard from a lot of attorneys, district attorneys, federal district attorneys, who are now going after some of these rogue pharmacies.
But it's hard because the laws now, there's enough wiggle room in there, that it's hard to track them down, prosecute and shut them down. And as soon as you shut them down, Heidi, boom.
COLLINS: Yes, because it's ...
GRIFFIN: ...they pop up with another name.
COLLINS: ...it's so vast, the whole Internet thing. I mean, like there's ...
GRIFFIN: Yes, it's huge, it's huge. COLLINS: ...no end to it, right, and expensive, too, I'm sure to try and track them all down.
Well, we appreciate it. Drew Griffin with our "SPECIAL INVESTIGATIONS UNIT," thanks.
Now, to this, a story we've been talking about for weeks. Surging oil prices putting Wall Street in a funk. Will the Dow bounce back from a new two-year low? Following the numbers, we're down 70 points. Dow Jones Industrial averages coming up in the NEWSROOM.
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